Cryptocurrency Tax to take effect from 1st July : TDS and more!

Now, get ready for 1% TDS Taxation on Cryptocurrency Trading starting July 1 in India. This new taxation rule will be applied on all types of Virtual Digital Assets in India.

by FighterMan Updated: 29 Jun, 2022, 15:37 IST
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In the recent Budget 2022, Indian FM Nirmala Sitharaman announced that Virtual Digital Assets (VDA) will also come under the Income Tax segment. Cryptocurrency had a huge impact as it is currently the biggest VDA in India. This new Cryptocurrency Tax rule will start from 1st July 2022. Also, make a note that if you have placed crypto orders before 1st July but they get executed on or after 1st July then Crypto Tax will be levied.

One of the important tax norms in crypto is TDS. As per the 194S rule of Income Tax, 1% TDS will be charged on considerations paid for transferring cryptocurrencies. This means that when you buy a cryptocurrency, 1% of transaction value will be deducted and withheld as TDS. Make a note that the crypto TDS amount will always be collected in Indian Rupees.

Types of TDS Deductions in Cryptocurrency Trading
Tax for Crypto Seller

If you buy cryptocurrencies from a seller by paying him Indian rupees then you won’t have to pay any TDS. However, the seller will have to pay tax. For instance, you buy Bitcoins worth ₹100 for which the seller will get ₹99 (1% TDS). Also, it depends on the trading platforms. Here are the Best Crypto Trading Apps in India you can checkout. 

Tax for Crypto Buyer & Seller

If you buy a crypto by redeeming a crypto then you as well as the seller will have to pay TDS i.e. 1% on each side. For example, you buy 1 Bitcoin for 10 ETH then you will get 0.99 Bitcoin while the seller will have to sell 1.01 Bitcoin.

Peer-2-Peer Crypto Taxation

Here, P2P USDT buyers are safe as they don’t have to pay Tax. On the other hand, P2P USDT sellers will have to pay 1% TDS per trade (TDS gets deducted from selling price automatically).

5% Crypto Tax

The Income Tax section 206AB says that if the person has not filed IT in the last 2 years and TDS is >= ₹50,000 per year then 5% Crypto TDS will be deducted.

This was all about the Cryptocurrency Tax in India. Are you a Crypto Trader or an enthusiast? Please feel free to share your views on this and how it will impact the Crypto market in India.

FighterMan aka Sahil Hitesh Ajmera is a 4+ Years Experienced Content Writer with 1.2M+ User Sessions, 486.41% max growth, and 1000+ Articles across Best Products, OTT, Telecom, Online Shopping, Finance, Credit Cards, Saving Tips, Deals & Offers, more!
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Deal Cadet Deal Cadet
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In india everything is under tax.
Ex bank minimum balance not maintained for that also 150 fine +28 rupees gst.
Only middle class &Working professional (private /Public sector )are getting affected due to this gst .
Rich people  never bothers about this get .(celebrity never collects salary through bank they only collects by cash )

Deal Cadet Deal Cadet
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government is the biggest thief

Deal Cadet Deal Cadet
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Already paying 30% tax on the salary income and again 30% tax on profit on investment. And government don't bother about loss on crypto they only wants money from profit.
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