In addition to the Income tax department earlier statement that it had been reduced to 0.1%, the Tax Deductible at Source (TDS) of digital assets was re-confirmed to 1% on June 8, as stated in the Union Budget 2022-23. When the department’s website earlier stated that the TDS rate for digital assets was reduced to 0.1% from the 1% established in the Union Budget, there was an error.
When a few people point out an error, the website updates its text to reflect accurate information. Several cryptocurrency platforms and investors are debating the issue on social media. The industry reacted differently; some have accepted the change, while others suspect it was a typo on the website.
The website also states that no tax will be levied if the aggregate amount does not exceed Rs. 10,000 per financial year and does not exceed Rs. 50,000 in a financial year, both of which have not changed.
The 1% TDS is expected to go live on July 1 and be the main cause of a significant drop in volume on Indian crypto exchanges, which has exacerbated the crypto crash around the world.
For months the industry has been negotiating with the government about 30% tax and 1% additional TDS. Experts have strongly criticised the move, which they see as a major obstacle to those involved in cryptocurrency trading.
TDS is considered a liability for both the customer and the government, as it requires the customer to claim a tax refund at the end of each financial year for each TDS deduction.
The move comes at a time when the cryptocurrency industry has seen a decline in transaction prices over the past two months. With the use of 30% tax in April, Indian trade has become important drop.
Read more: India’s GST council gearing up for cryptocurrency taxes discussion in June meet
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