In the Indian finance bill of 2022, TDS (Tax Deducted at Source) on crypto was introduced where we have to pay 1% TDS for buying any digital assets/crypto. Now as a buyer and sellers we do not have to think much about it because this can be done by the Indian Exchanges. So yes, if we are buying/selling any digital assets from the 1st of July we have to pay 1% TDS.
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Any trade that happened before the 1st of July, will not get affected. In simply put, TDS will not be deducted if we are buying Crypto using INR but if we are selling the Crypto for INR then we have to pay TDS. If we are buying/selling Crypto assets by paying any other crypto assets then we have to pay the TDS for both buying and selling.
For example, if I am buying Bitcoin for Rs 100 from INR, there is no Tax, but if I am selling the same Rs 100, I have to pay Rs 1 as TDS and I will be getting Rs 99. And if I am buying 10 ETH from 1 Bitcoin then I have to pay 1.01 BTC as .01 Bitcoin would be paid as TDS. Similarly, if I have to sell 10 ETH for 1 Bitcoin, I will get 0.99 BTC i.e. 1% TDS.
So yes along with the 30% Crypto Profit Tax we also have to pay 1% TDS in every buying and selling if done through crypto, whereas if done through INR we only have to pay tax on selling. The problem is mainly for the intraday traders because they do so many trades and thus every time they have to pay the 1% TDS, which is nothing but overhead for each of us.
Do let me know if you have any other questions on TDS.
