How Proposed 1% TDS On Crypto Transactions Will Work

BSP leader Ritesh Pandey said that introducing the 1 per cent TDS on blockchain transactions is going to hamper the way this business is done.

The Lok Sabha today approved the Finance Bill, which gives effect to new taxation on transactions involving digital assets. The bill proposes a 30 per cent tax on capital gains out of virtual digital assets. Once passed into law, a 1 per cent TDS would also be imposed on every such transaction.  

During the debate on the Finance Bill in Lok Sabha, the Opposition said that the government is still sending mixed signals on virtual digital assets, and asserted there should be clarity on the definition of crypto.

Bahujan Samaj Party (BSP) leader Ritesh Pandey said that introducing the 1 per cent TDS on blockchain transactions is going to hamper the way this business is done.  

Mr Pandey explains how the tax will work with an example. In the first transaction, a user will buy a cryptocurrency. They will then transfer it to a wallet. Using the balance in the wallet, the user can buy a non-fungible token (NFT).