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.

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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.

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Deal Cadet Deal Cadet

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

government is the biggest thief

Deal Cadet Deal Cadet
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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