One of the largest crypto exchanges in India, CoinDCX recently announced the implementation of the 1% TDS rule on crypto transactions through its app. As per the Government of India’s announcement, the 1% TDS will become applicable on crypto transfers from the 1st of July 2022 on the sale of crypto and other virtual digital assets.
In the Union Budget 2022, Finance Minister Nirmala Sitharama had said that TDS of 1% will be levied on payments made for the sale of virtual assets from July 1. Additionally, a 30% tax on income from crypto transactions will also apply from the current financial years.
TDS is the tax deducted at the source paid to the Government on behalf of the deductee.
In an official blog post, CoinDCX has explained how the 1% TDS rule will be implemented on its app. Here are the details:
Transactions where TDS will not apply
No TDS will apply on Buy, Limit Buy, CIP and Earn orders.
CIP is an acronym for Crypto Investment Plan offered by CoinDCX. It is also a kind of a buy order.
Transactions where TDS will apply
The 1% TDS will be deducted on Sell and Limit Sell orders.
The exchange said that all users will have to mandatorily complete their KYC process on or before July 1, 2022 to make any transaction on the app.
The 1% TDS may be claimed as a refund while filing ITR for the financial year if the income tax payable is less than the TS deducted.
The exchange said that 1% TDS will be applicable on the sell transactions on all crypto assets.
“The TDS will be applicable on every sell transaction on all crypto assets from 1st July 2022. Before selling a crypto asset, you can see the TDS deductions by clicking on the (i) button on the SELL ORDER screen. You can also check the “Order Details” page to view your TDS deductions for each transaction. Thus, you do not have to pay TDS to withdraw INR from the CoinDCX wallet into your bank account as you have already paid TDS when you sold your crypto and got INR in return in your wallet,” the exchange says.
(Cryptos and other virtual digital assets are unregulated in India. They are considered extremely risky for investment. Please consult your financial advisor before making any investment decision)
