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From July, every cryptocurrency sell order will attract 1% TDS (Tax Deducted at source) if transaction size exceeds Rs.10,000.
The TDS deduction will also be applicable on non-fungible tokens (NFTs) and all other virtual digital assets.
According to a clarification issued by the Central Board of Direct Taxes (CBDT), the onus of withholding the TDS will lie with the person making the payment to the seller — a buyer, an exchange or a broker.
A TDS deduction of 1% was announced by Finance Minister Nirmala Sitharaman in the Union Budget 2022-23. During the Budget speech, the finance minister had also announced a 30% tax on gains made from cryptocurrency investments.
Since then, the crypto craze in India has subsided. Transactions dropped by as much as 30% in several exchanges. The slump in prices of virtual currencies and the introduction of 1% TDS is likely to dampen investors' interest further.
