Namaste Traders,

As you are aware, the Finance Bill of 2022 introduced a new section called 194S in the Income-Tax Act, 1961, to levy 1% TDS on any consideration that will be paid for the transfer of Virtual Digital Assets (VDA) like Crypto. 

The TDS provisions will be applicable from 1st July 2022. As per these provisions, tax (TDS) will be deducted on each sell trade on Colodax.

Making it simpler, you as a buyer or seller will not have to do anything. Colodax will do the needful. To help you understand these provisions better, here are a few pointers:
  • No tax (TDS) will be deducted from the buyer on buying Crypto using INR.
  • As per Section 206AB of the Income-Tax Act, 1961, if any user has not filed their Income Tax Return in the last two years and the amount of TDS is ₹50,000 or more in each of these two previous years, then the tax (TDS) to be deducted for Crypto related transactions will be at 5%. 
  • In order history, you will see the applicable TDS included in total trading fees.
  • From July 1st, trading fees  (inclusive of TDS) for the seller will be 1.15% and buyer fees remain the same i.e 0.15%.
  • All pending/partially-filled orders will be cancelled on June 30th and you will have to place them again.


We hope this email helped you simplify the views and get a clear picture of the TDS rule. If you have any further queries, please reach out to us at colodax.freshdesk.com


Happy Trading! ?

Warm Regards,
Team Colodax


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References:

https://www.incometaxindia.gov.in/communications/circular/circular-no-13-2022.pdf