Industry insiders welcome crypto TDS guidelines, hope for reduction in rates
Most crypto industry players welcomed this early guideline for TDS on crypto transfers which was released by the CBDT last week.
- Jun 28, 2022,
- Updated Jun 28, 2022 11:59 AM IST
The newly introduced TDS on crypto transfers will be in effect as of July 1 and guidelines to clear the air around the same have been released by the Central Board of Direct Taxes (CBDT).
As per the latest tax laws, anyone purchasing VDA must deduct 1 per cent TDS from the consideration being given to the VDA vendor. The guidelines describe how the TDS duty operates in various circumstances, such as when a transaction is made on an exchange, through a broker, or in a VDA to INR or VDA to another VDA transaction.
It is important to note that these guidelines - with the exception of the rule relating to computing the total consideration paid for the VDA—apply solely when a transfer of VDA is occurring on or through an exchange.
Here is what the industry insiders think about the latest guidelines:
Edul Patel, Co-founder, Mudrex:
The early clarification from the income tax department on the TDS before it comes into effect on July 1st is good news as the crypto industry has been waiting for it.
Shantanu Sharma, Vice President, Growth and Marketing, EasyFi Network:
The clarification on TDS by CBDT is a welcome step to allay the confusion prevailing in the industry. These clarifications fix the applicability and responsibilities for compliance towards TDS deductions which is a good way forward, despite the overall apprehension about the taxation structure. We should expect more such clarifications on VDAs coming up in the future as we move forward with this tax regime.
Vikram Subburaj, CEO, Giottus Exchange:
We continue to believe that the government will monitor the implementation and consider reducing the TDS percentage to create a healthy and compliant ecosystem.
Satya Muley, advocate, Bombay High Court and Supreme Court of India:
India's clarification on crypto tax is good news to crypto traders and exchanges. Investors now finally have the clarity on the TDS rule. As per section 194s of India's Income Tax act, crypto exchanges and brokers will have to now deduct tax from their users. Taxes must be paid to the income tax department within 30 days from the end of the month in which the deduction was made.
It seems that the government's stance is clear which is encouraging people to trade less. Notably, majority of crypto is held by our investors and they trade very less. Trading is not an income source for them but long-term holding is.
Also Read: EXCLUSIVE: ZebPay blocks user accounts following triangular arbitrage trade - BusinessToday
Also Read: Are Indian crypto exchanges headed for massive layoffs? Insiders think so - BusinessToday
The newly introduced TDS on crypto transfers will be in effect as of July 1 and guidelines to clear the air around the same have been released by the Central Board of Direct Taxes (CBDT).
As per the latest tax laws, anyone purchasing VDA must deduct 1 per cent TDS from the consideration being given to the VDA vendor. The guidelines describe how the TDS duty operates in various circumstances, such as when a transaction is made on an exchange, through a broker, or in a VDA to INR or VDA to another VDA transaction.
It is important to note that these guidelines - with the exception of the rule relating to computing the total consideration paid for the VDA—apply solely when a transfer of VDA is occurring on or through an exchange.
Here is what the industry insiders think about the latest guidelines:
Edul Patel, Co-founder, Mudrex:
The early clarification from the income tax department on the TDS before it comes into effect on July 1st is good news as the crypto industry has been waiting for it.
Shantanu Sharma, Vice President, Growth and Marketing, EasyFi Network:
The clarification on TDS by CBDT is a welcome step to allay the confusion prevailing in the industry. These clarifications fix the applicability and responsibilities for compliance towards TDS deductions which is a good way forward, despite the overall apprehension about the taxation structure. We should expect more such clarifications on VDAs coming up in the future as we move forward with this tax regime.
Vikram Subburaj, CEO, Giottus Exchange:
We continue to believe that the government will monitor the implementation and consider reducing the TDS percentage to create a healthy and compliant ecosystem.
Satya Muley, advocate, Bombay High Court and Supreme Court of India:
India's clarification on crypto tax is good news to crypto traders and exchanges. Investors now finally have the clarity on the TDS rule. As per section 194s of India's Income Tax act, crypto exchanges and brokers will have to now deduct tax from their users. Taxes must be paid to the income tax department within 30 days from the end of the month in which the deduction was made.
It seems that the government's stance is clear which is encouraging people to trade less. Notably, majority of crypto is held by our investors and they trade very less. Trading is not an income source for them but long-term holding is.
Also Read: EXCLUSIVE: ZebPay blocks user accounts following triangular arbitrage trade - BusinessToday
Also Read: Are Indian crypto exchanges headed for massive layoffs? Insiders think so - BusinessToday