Beginning on July 1st, 2022, Virtual Digital Asset (VDA) sales and transfers will be subject to a 1% Tax Deduction at Source (TDS) under the Finance Act of 2022.
In order to clear up any confusion over the new Section 194S, which will go into effect on July 1, 2022, the Central Board of Direct Taxes (CBDT) issued instructions.
According to the rules, the tax of 30% on your yearly returns will be imposed annually, at the end of every financial year, while the TDS of 1% on “Payment on transfer of Virtual Digital Asset (VDA)” will be applicable from July 1st. This TDS deducted from you while making transactions will be paid to the government by the Suncrypto itself.
At the end of the financial year, this TDS will be available as a credit against your tax liabilities.
To comply with this, on or before July 1, 2022, all users must successfully complete their KYC procedure in order to conduct any transaction (Buy/Sell) on Suncrypto.
This is how the TDS will be applied: –
- Insta Spot Buy – No TDS is applicable (If you buy any crypto with INR Pair, then TDS is not applicable
- Insta Spot Sell – 1% TDS is applicable (If you sell any crypto with INR Pair then 1% TDS applicable)
How Suncrypto will work with this 1%TDS
We will have to take this tax out during trading activity in accordance with the Income Tax Act, and we’ll have to file TDS returns with the tax authorities after that. When you file your yearly income tax returns, the TDS can be subtracted from your total tax obligation.
For example, if you want to sell 100 coins, each price is ₹100. So the amount you will pay will be ₹10000 (100 x ₹100 = ₹10000). Suncrypto will then deduct fees & GST, let’s say ₹10 (imaginary number).
This will make the total amount ₹9990. After this, a TDS of 1% would be applicable to the remaining amount (1% of ₹9990 = ₹99.9). With these deductions made, the balance will be deposited into your account is 9890.9 (₹9990 – ₹99.9 = ₹9890.1).
And this 99.9 (imaginary TDS) will be sent to the government through Suncrypto.
For any doubts, Suncrypto Exchange will be there to assist you while making transactions and the invoice bill will clear the rest for you.
For more related information and news you can check Suncrypto Academy.