What is 1% TDS on crypto trade and how will it impact you?

economictimes.indiatimes.com:

TDS) on the transfer or consideration of every trade from July 1, 2022. However, the market players are awaiting the 'clarities' over the new taxation norm and the Government of India has about two months to provide the required 'specifications' seeked by the players. While the industry players see this move as one of the most controversial provisions over the crypto taxations, the government believes that the new TDS mechanism is used to trace transactions and prevent tax evasion.

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Crypto businesses, particularly the exchanges, have repeatedly demanded to remove or lower the TDS, which for them is the biggest pain point in the new crypto tax legislation. Avinash Shekhar, CEO, ZebPay said that in the case of a crypto-fiat transaction, the buyer would need to deduct this amount and deposit it on behalf of the seller, allowing the tax authorities to effectively monitor all crypto specific transactions entered into by Indian residents. «In the case of crypto-crypto swaps, the 1 per cent TDS will be applicable to both parties based on the fair market value (FMV) of the crypto on the date of the transaction,» he added. TDS is a liability enforced against the exchanges that deposit tax on behalf of sellers on the platform. It will be calculated at 1 per cent of the transaction value. Until now, it is quite unclear how TDS will be calculated and how exchanges will share data with the government. The industry is seeking clarity on two major points – trading and swaps of virtual digital assets (VDA). Sathvik Vishwanath, Co-founder and CEO, Unocoin said that the