crypto TDS India

When you trade crypto in India, crypto TDS India, a 1% tax deducted at source on crypto transactions above ₹50,000 (or ₹10,000 in some cases). Also known as Tax Deducted at Source on digital assets, it’s not a tax on profits—it’s a withholding that applies every time you buy or sell, even if you lose money. This rule, introduced in July 2022 under Section 194S of the Income Tax Act, changed how millions trade. Unlike capital gains tax, which only hits when you profit, TDS grabs money upfront—no matter if your trade ends in gain or loss.

It’s not just about the tax rate. Indian crypto regulations, a mix of strict reporting, exchange compliance, and unclear legal status. Also known as crypto laws in India, they force exchanges like WazirX and CoinDCX to act as tax collectors, not just trading platforms. If you trade on an Indian exchange, TDS is automatic. But if you use a foreign platform like Binance or Kraken, the tax still applies—except now you’re responsible for tracking and paying it yourself. Many users don’t realize this. They think avoiding Indian exchanges means avoiding TDS. It doesn’t. The law applies to all Indian residents, no matter where they trade.

Crypto tax India, a system where every transaction triggers reporting, not just annual profits. Also known as digital asset taxation, it’s one of the most aggressive crypto tax regimes in the world. You can’t just file a simple ITR-1 anymore. You need to track every swap, every staking reward, every NFT sale. And yes—even if you swap Bitcoin for Ethereum, that’s a taxable event. The government doesn’t care if you didn’t cash out to INR. The moment you trade one digital asset for another, TDS kicks in and your transaction gets logged.

What does this mean for you? If you’re trading regularly, you’re paying TDS every single time. That 1% adds up fast. A ₹50,000 trade? ₹500 gone before you even see the result. A ₹2 lakh trade? ₹2,000 deducted. And if you’re doing this weekly? You’re losing thousands a year to TDS alone—not to mention capital gains tax later. Most people don’t plan for this. They think crypto is about buying low and selling high. But in India, the first thing that happens is money gets taken out.

There’s no official exemption for small traders. No threshold for hobbyists. Even if you’re just swapping small amounts to try new tokens, TDS applies. That’s why many users now use peer-to-peer platforms or non-KYC exchanges—to avoid the deduction. But that comes with its own risks: no buyer protection, no dispute resolution, and still, the tax liability doesn’t disappear.

And then there’s the confusion around crypto trading India, a landscape where legal gray areas clash with real-world behavior. Also known as digital asset trading in India, it’s a mix of compliance and underground activity. Millions still trade. The government hasn’t shut it down. But it’s watching. Every exchange reports your activity. Every wallet address linked to an Indian bank gets flagged. And if you’re doing large trades without reporting? You’re asking for trouble.

Below, you’ll find real breakdowns of how TDS affects different types of traders, what exchanges do (and don’t) tell you, how to track your tax liability, and which crypto projects in India are still active despite the rules. No theory. No guesses. Just what’s actually happening on the ground.