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HELLO ! Traders ,
I hope you guys are doing well and that your journey is also going good . But from July 1st, you have to pay 1 % TDS on each trade. If you still don’t understand the TDS concept, let’s study it .
I’ll try to make you understand the TDS concept very easily, so let’s start.
Under the new tax regulations, tax (TDS) will be deducted for crypto or virtual digital asset (VDA) transactions. The provisions related to 1% TDS will come into effect on July 1, 2022, while the gains will be taxed effectively on April 1, 2022.
Where will the 1% TDS be applicable?
TDS of 1% will be applicable with effect from July 1st, 2022, onwards on transactions of cryptoassets and NFTs. ( As per revised Income Tax Rule )
Fiat Transactions to Buy or Sell Crypto:
Buy order- No TDS
Sell order- 1% TDS on order Value after deduction of service/commission charges.
Example: If you create a Sell order of 1 ETH for INR 10,000
Order Value — INR 10,000
Transactions Fees, Say 0.1% of 10,000=INR 10/-
( 0.1 % is indicative and is subject to changes as per different exchanges )
TDS — 1% of 9,990/-(10,000–10)= INR 99.90/-
Total Amount after deduction of Transactions fees and TDS= 10,000–10–99.90= INR 9,890.10/-
TDS is only applicable to the sale of cryptoassets.
It is not applicable on buying or withdrawing funds from the wallet or exchange to your bank account.
The amount maybe adjusted or claimed as a refund while filling out the ITR for the financial year.
Crypto-to-crypto transactions:
Convert -1% TDS on Sell order Value after deduction of service/commission charges.
If 1 BTC converts to 20 ETH, then 1% TDS will be applicable on the seller of BTC and 1% TDS will be applicable on the seller of ETH.
As a buyer or seller, you are not required to take any action. Exchanges will take care of TDS collection, and terms and conditions will be modified accordingly. Exchanges will provide you with the following documentation for complete transparency.
- Transaction note with the breakup of TDS and fees
-Quarterly Form 16A certificate
I hope this article helps you understand the new tax regulations in very easy way. If you have any other questions, please send me a DM at CRYPTO-HARSH24 .
Regards,
Crypto Harsh24
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