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Crypto exchanges to brief policymakers on TDS tangles
February 07, 2022
The industry body representing cryptocurrency exchanges has decided to reach out to relevant policymakers to brief them about complications arising out of the government’s move to levy a 1% TDS (charge derivation at source) on all crypto transactions.
The issue was discussed at the meeting of the Blockchain and Crypto Assets Council (BACC) on Saturday, where the overwhelming view was that this move would mark crypto trading volumes and drive small traders towards casual Person to Person (P2P) trading and decentralized exchanges (DEX).
Crypto exchanges determine a large chunk of their revenues from traders who frequently trade and pay a small sum on every exchange.
As indicated by the arrangements of the current year’s finance bill, the purchaser of a cryptocurrency needs to deduct 1% of the deal thought and pay the sum as an advance tax to the government on the behalf of the seller on every trade.
The withholding will apply where sale consideration is more than or equivalent to ₹50,000 (for specific individual payers) and ₹10,000 for others.
TDS must be deducted on both crypto to rupee and crypto to crypto swaps. But people opposed to these provisions say the provisions are impractical and will lead to complications in compliance.
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