JOIN USCoinDCX, Zebpay to cut TDS on all transactions
As crypto exchanges gear up to levy a 1 per cent TDS on all crypto transactions as mandated by the government, there is no uniformity in the way this will be processed by exchanges.
While few exchanges like Giottus will cut Tax Deducted at Source (TDS) based only on the exemption limit set by the government, others like CoinDCX and Zebpay will cut TDS on all transactions irrespective of the transaction amount.
"We, at CoinDCX will cut TDS on all transactions to be on the safe side. The threshold of Rs 10,000 for individuals and Rs 50,000 for institutions cannot be implemented", Mridul Gupta, the COO of the unicorn crypto exchange CoinDCX told DH.
Giottus, on the other hand, says that they will be monitoring all transactions and cut TDS once a user breaches the threshold, Arjun Vijay, Co-Founder and Chief Operating Officer (COO), Giottus Cryptocurrency Exchange, told DH.
"We keep a track of the cumulative trade value of users. We already do it. Once this threshold is breached we can deduct the tax", Vijay told DH. This essentially means that users of such exchanges, where all transactions will be taxed, will have to wait till they file their income tax returns to get back their money.
"We have set up systems to effectively deduct TDS before settlements with transacting parties are made. This is in line with legal requirements and will ensure a high degree of compliance is achieved for all trades on the platform", Tarun Jain, CFO, ZebPay told DH.
B E Kumar Prasad, a Bengaluru-based CA says that this tax will show up as a credit in Form 26AS and is like any other applicable TDS. He adds that the brokerage or the exchange will have to give a credit to the seller of the virtual digital asset when e-returns are filed.
Starting July 1, a 1 per cent TDS will be applicable on crypto transactions which is classified as a virtual digital asset. The threshold of Rs 10,000 and Rs 50,000, are for the financial year.