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CMA Final · Direct Tax Laws and International Taxation · E-commerce Transaction and Liability in Special Cases

Under the Income-tax Act, 2025, an e-commerce operator facilitates the sale of a virtual digital asset, and the transaction is covered by both the e-commerce provision (serial 8(v)) and the virtual digital asset provision (serial 8(vi)). How is tax deducted on that transaction?

Tax is deducted only under the virtual digital asset provision, serial 8(vi), at 1%. Note 4 says that when both the e-commerce and virtual digital asset provisions apply, the latter alone governs, overriding the e-commerce precedence in Note 3.

  1. AUnder both provisions, so 1.1% in total
  2. BUnder serial 8(v) only, at 0.1%
  3. CUnder serial 8(vi) only, at 1%Correct
  4. DUnder neither, because of the e-commerce override

Explanation

Note 4 states that where serial 8(v) and 8(vi) both apply, tax is deducted only under 8(vi) despite anything in Note 3. The rate is therefore 1%, not 0.1%, and there is no double deduction.

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