Crypto TDS India: What It Is and Why It Matters for Indian Crypto Investors
When you trade crypto in India, Crypto TDS India, a tax deduction at source rule that applies to cryptocurrency transactions. Also known as TDS on crypto, it means platforms must take 1% of your trade value before you even see your profit—or loss. This isn’t optional. It’s law, enforced since July 2022, and it affects every trader, no matter how small the trade. If you’ve ever wondered why your Binance or CoinSwitch payout looks smaller than expected, this is why.
The TDS on crypto, a tax mechanism applied at the point of transaction by exchanges. Also known as crypto tax deduction, it’s not a final tax—it’s a prepayment. Think of it like a down payment on your capital gains tax, collected upfront so the government doesn’t have to chase you later. But here’s the catch: if you’re buying crypto with INR and selling it later, TDS applies to both sides. That means even if you break even, you still paid 1% in tax on the buy and another 1% on the sell. No refunds. No adjustments. Just money gone before you even file your return. This makes simple trades like swapping ETH for SOL or buying BTC with UPI feel like a financial trap if you don’t plan ahead.
What’s worse? Many Indian crypto users still think TDS is the same as income tax. It’s not. TDS is just the first step. You still need to report all your crypto gains under Indian crypto regulations, the legal framework governing digital asset taxation and reporting in India. Also known as crypto tax laws India, it requires you to calculate profits across all wallets and exchanges, not just the ones that deducted TDS. If you moved crypto from WazirX to CoinDCX and traded there, you owe taxes on that gain—even if neither platform reported it to the Income Tax Department. The government tracks wallet addresses now. They cross-reference exchange data with blockchain analytics. You can’t hide by switching platforms.
And it’s not just about selling. Even gifting crypto to a friend, staking rewards, or earning from airdrops can trigger tax events under these rules. The rules are clear: if you gain value from crypto, the government wants a piece. The question isn’t whether you’ll be taxed—it’s whether you’ve been tracking it right.
This page collects real, up-to-date guides on how Indian traders are handling TDS, what exchanges are doing to comply, and how to avoid costly mistakes. You’ll find reviews of platforms that handle TDS correctly, breakdowns of how to file your crypto returns, and warnings about scams pretending to "refund" your TDS. No fluff. No theory. Just what works for people trading crypto in India today.
