The sale and/or transfer of virtual digital assets—VDA, or Crypto in common parlance—will be subject to TDS, or tax deducted at source, at the rate of 1% effective from 1st July 2022. We break down the process to help you better understand nitty-gritties on the official circular released on 22nd June 2022.

A Refresher

TDS is an advance tax to establish a transaction trail, deducted at the time of trade execution, and can be adjusted against your total tax liability at the time of filing your annual income tax returns.

Tell me more, please?

TDS is applicable on sell transactions. This means that you, as the buyer, are liable to submit TDS whenever you buy Cryptocurrency from our vending machines or through our agents. Submission of TDS will the responsibility of the crypto buyer.

Are there any exceptions?

As per the Finance Act 2022, your transactions will not be subject to TDS if your total trade value doesn’t exceed INR 10,000 in the said financial year (2022-23). In order to comply with this exception, Digital Assets will require your PAN number when you purchase cryptocurrency from our vending machines for any transaction over INR 10,000

FAQ’s

Q1. Is there a TDS Cap?

A1. A TDS of 1% will be applicable on all your transactions if your annual aggregate trade value crosses the ₹10,000 limit.

Q2. What happens if my income doesn’t fall in any tax bracket?

A2. TDS will still be deducted, irrespective of the income tax basic exemptions. However, you can claim a refund if your total tax liability is zero or lower than what you have already paid in the form of TDS while filing your annual income tax returns.

Q3. How is TDS different from the 30% tax?

A3. TDS is meant to establish a money trail. You can adjust this against your total tax liability for the year. The 30% tax is payable on profit on the sale of VDA.

Q4. What about the VDAs I receive through coupons?

A4. TDS will not be applicable when you redeem a coupon to receive Cryptos. It will be applicable when you sell those.