TDS on crypto (1%)

TDS, or tax deducted at source, on crypto is India's rule that the buyer of a virtual digital asset, or the exchange in practice, must deduct 1% of the sale consideration and pay it to the government on the seller's behalf. It was introduced as Section 194S of the Income-tax Act, 1961 from 1 July 2022 and continues under Section 393 of the Income-tax Act, 2025.

TDS applies to swaps of one VDA for another as well as to rupee sales. It does not apply if aggregate consideration in a financial year stays within ₹50,000 for a "specified person", broadly individuals and HUFs without business income or under the audit turnover limits, or within ₹10,000 for others. The rate rises to 20% if the seller has not furnished a PAN.

TDS is not an extra tax. It shows up in your Form 26AS and AIS, and you claim it as a credit against your final liability.