How Can TDS Affect Indian Traders?

The New Finance Bill (2022), also known as the crypto tax bill, aims to levy a 1% TDS on crypto transactions. TDS, Tax Deducted at Source, is applicable on Exchange trading, P2P orders, etc, starting from 1st July 2022.

The idea behind TDS is to collect tax from the very source of income. In other words, a person who is required to make a payment of a specific sort to another person must withhold tax at the source and deposit it into the Indian Government’s account. Therefore, in this article, you will discover more about TDS and how it can affect Indian traders.

Which Exchanges Are Taken Into Account for TDS In India?

Presently, the trades on the Indian exchanges like WazirX, CoinDCX, and CoinSwitch Kuber are taxable. It doesn’t mean Binance, Kucoin, and MEXC are exempted, but it will take some time to implement TDS on these global exchanges. That is, the new crypto tax is limited to Indian exchanges.

How to pay TDS in India?

As a buyer or seller, you don’t have to do anything, and as the name suggests, the exchanges will deduct 1% on your trade automatically. Your exchange will collect the TDS and submit it to the Indian government.

Do I Have to Pay TDS for My Trades in June?

No. The tax provision is applicable from July only. However, if you have not filed Income Tax Return for 2020-21 and 2021-22, and the total transaction exceeds 50 lakhs each year, you will have to pay a TDS of 5% for 2022-23.

Will I Be Affected if I Use Usdt in p2p Trades?

If you use an Indian exchange to buy or sell USDT via the P2P method, then TDS provisions apply to the seller only. That is: Whenever you sell USDT for INR in a P2P trade, you have to pay 1% as TDS. But when you buy USDT, your transaction is tax-free!

Now, What Are The Implications For New Crypto Investors?

Although the tax provision is a setback for traders, it is not too harmful to the industry. These are the effects:

1) Tax gives legitimacy to crypto trades
2) It allows for tax-free entry to the crypto market
3) FUDs on the crypto ban will disappear, and it will boost the confidence in crypto assets

Win $6,699 worth of bonuses in the exclusive MEXC & Altcoin Buzz Giveaway! Find out more here.

For more cryptocurrency news, check out the Altcoin Buzz YouTube channel.

Find the most undervalued gems, up-to-date research and NFT buys with Altcoin Buzz Access. Join us for $99 per month now.


Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.