So here’s how it will work for you, as an investor or trader on Mudrex. There are four scenarios and any one of which is going to play out in any given situation. A brief explanation is given in the infographic above.
SITUATION 1 – BUYING CRYPTO WITH INR
In this situation, you don’t have to pay any TDS. Since you’re buying with INR, the government doesn’t need you to pay for it just yet.
SITUATION 2 – SELLING CRYPTO FOR INR
In this scenario, you will be required to pay the 1% TDS on the net value of the sell transaction. If you were selling ₹1000 of Bitcoin today, 1% would be deducted from the selling amount after deducting exchange transaction fees from it (Refer to the example in the infographic before).
SITUATION 3 – BUYING CRYPTO WITH CRYPTO
In this situation, you will be required to pay a 1% TDS on the sale transaction of the crypto you are exchanging for another crypto asset. For example, if you were using 1000 USDT to buy $1000 worth of Bitcoin, you will be required to pay 1% of 1000 USDT, or about 10 USDT as the TDS.
SITUATION 4 – SELLING CRYPTO WITH CRYPTO
And finally, in this scenario, if you were selling your Bitcoin for USDT, you will need to pay 1% of the value of Bitcoin in INR that you would be selling as the Tax Deducted at Source.