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Who will deduct the TDS on crypto?
The crypto exchange will deduct the TDS from your crypto sales. The time you sell your crypto on the exchange, 1% TDS will be deducted and the amount received after you sell the crypto will be remitted to your bank account.
Additional Read: 30% Crypto Tax Guide
Is TDS applied on INR deposits on the CoinDCX crypto investment app?
As per the crypto tax guidelines, TDS is not applied to INR deposits nor is it applied to an individual withdrawing INR from a crypto exchange. TDS is levied only on selling crypto assets.
How many times will TDS be applied and when?
Tax deducted at source, also called an advance tax in some case scenarios, is applied only when a person sells their crypto assets. Every time you sell a crypto asset 1% TDS will be deducted by the exchange.
To understand the 1% TDS in detail please read our blog on Crypto TDS
Does one have to pay TDS on any dormant crypto investments on selling?
If you are selling your crypto on an exchange 1% TDS will be levied on the amount. For example, if you have brought crypto assets worth 1 lakh and have earned a profit of INR 50,000, then 1% TDS will be deducted at the time of sale.
To understand the TDS and its jargon better here is a compiled list of Crypto 1% TDS Glossary.
Is TDS levied if an investor buys a BTC or USDT pair? Is TDS levied if an investor sells BTC or USDT pair?
The Thumb rule of TDS is that 1% of your total investment will be deducted at the time of sale only. Simply put, when any crypto asset is moved from one individual to another 1% TDS will be levied on the total amount. In the case of crypto to crypto trading, there is an exchange of crypto between two parties which means selling on both sides.
Will TDS be levied on crypto deposits? How will the tax be calculated for crypto to crypto earnings?
Tax will be levied only on crypto sales. Any deposits in crypto or INR will not be taxed. If a crypto asset is sold in lieu of crypto then 1% TDS will be levied on the equivalent rate of the asset. For example, if you sell 100 UDST at 89 INR per token. 1% TDS will be levied on 8900 INR which amounts to 89 INR.
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Disclaimer: Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. In case you have any queries, write to firstname.lastname@example.org.
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