As per the new section 194S of the IT Act of 1961, taxation on VDAs will be 30% +1% TDS. But the buyer need not have to deduct the TDS; but it will be done by the seller. Exchanges have done the same while raising the market order. But the question is how P2P or outside of the exchange trade will function? In this TL;DR escape, we have resolved that for our readers;
How P2P or Outside the Exchange Transaction Will Work for TDS?
The buyers need to file for TDS after they have collected TAN and other details from the seller. These details are necessary for filing for the TDS return. On top of this, the buyer must see that the VDAs acquisition doesn’t exceed INR 10,000 for any month. If that happens, they need to file the TDS. However, in the case of a specific person, TDS must be deducted only if the purchase amount is above 50,000 INR in a month. The concerned person needs to file the TDS form through 26QE but it doesn’t require TAN through this means.
However, while defining a specific person, that individual should not have income exceeding 1 Crore or 50 lakh in a year.
But the government has said that in case if the crypto HODLER is not selling their crypto, they need not have to pay taxes. But there’s one catch where buyers who are acquiring crypto assets through P2P need to file TDS. In that way, it would expose their crypto holdings and source where they have stored it. That said, the government will have full control over the exchange since they will have the information and the exchanges cannot deny the same. So, apparently the rhetoric not your key not your crypto sounds legit in that case.