During the Union Budget 2022–23, it was announced that a TDS of 1% on crypto would be applicable effective July 1. Here’s what that means for you as a crypto user.
What is TDS?
TDS stands for Tax Deducted at Source and denotes a fee paid to the central government for certain financial transactions including salary payout, trading, etc.
Is TDS applicable to cryptocurrencies?
Yes, as per the revised income tax laws, TDS deduction will be applicable to transfers of all virtual digital assets (VDA) including cryptocurrencies and non-fungible tokens (NFTs).
Here’s a more detailed breakdown of how different crypto transactions on Krypto will be taxed:
TDS is applicable when you:
- Sell crypto for INR
- Exchange one cryptocurrency for another
- Have placed an order before July 1st, but the order is executed on or after July 1st
- Use Krypto Pay (available only on the mobile app)
TDS is NOT applicable when you
- Buy crypto using INR
- Deposit or withdraw money on our exchange
- Use Krypto send (available only on the mobile app)
- Transact with a broker on the Krypto platform (as long as the trader themselves deduct the required TDS and they have a written agreement with Krypto specifying the same).
An example of how TDS works — Imagine 1 ETH is traded for 1000 INR. The ETH seller will receive 990 INR (after a 1% TDS deduction) and the ETH buyer will receive 1 ETH (no TDS deducted).
Will I have to pay TDS if I incur a loss?
TDS will be applicable irrespective of whether you make a profit or loss in a transaction.
Can I reclaim the TDS? If yes, how?
Yes, you can file for a TDS refund based on your income slabs. For more information, visit Income Tax India — File TDS Return.
Where can I view the TDS deducted on the Krypto platform?
To maintain transparency, all TDS deductions will be visible to you in the History | Trades section on Krypto.
Where can I learn more about TDS on VDAs?
To make this transition easier, Krypto will handle all necessary deductions for our users and maintain transparency throughout. In case of further queries, you can reach us at email@example.com.