1% TDS on Cryptocurrency Trading: Crypto traders may fall short of capital, Govt likely to lose Millions in Crypto Tax Revenue

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New Delhi: In Budget 2022, the Government had announced its decision to impose 1% TDS on all crypto/virtual digital asset transfers. On Tuesday (March 8), Finance Minister Nirmala Sitharaman said the government is seeking a possibility of revenue in crypto.

The announcement was made not only on the 1% TDS on crypto transfers, but the government also announced a flat 30% tax on profit from crypto transactions.

About TDS on crypto trading

Nischal Shetty, founder of WazirX founder said that 1 per cent TDS on crypto trading will result in huge loss of tax revenue for the Government.

According to his calculations 1% TDS on Crypto trading shows:

1. The trading volume will go down.

2. The profits on trading will also go down.

3. Also, a large number of TDS refunds will need to be processed.

4. Meanwhile, the govt will have to face massive income tax loss.

He further said that the solution to this “lose-lose situation” for both crypto traders and Government is 0.1% TDS, which means $100M in TDS.

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