The Income Tax department on their latest issue of their official document of updates and changes stated that the new Tax Deducted at Source Rate for virtual digital assets (TDS) will now be changed and reduced to 0.1%. This of course brought joy to scores of Indians across the country and especially crypto currency enthusiasts who have been complaining about the big chunk of money and earnings the government takes away from them as a source of tax.
However, these celebrations were swiftly thwarted by the government as they announced that they had made a mistake in the document and went on to update it. There has been no change for TDS for VDAs now and it will stay at 1% when it was announced during the heralding of the new financial year during the budget announcement.
Prior to fixing the mistake, many people noticed the change and spread the news on social media until their hopes came crashing down as it was merely a mistake by the government of India.
As the news was being spread around, although many people did find joy in it, many others just brushed it aside assuming it was a mistake by the government and they proven right shortly after as it was corrected back to 1%.
However, what remains unchanged is the clause where there will be zero taxes for total values that stay below that Rs. 10,000 mark also if does not cross the Rs. 50,000 mark for the entire fiscal year.
The 1% TDS on VDAs will come in to play on the 1st of July and this one rule has been the primary reason for such a massive slump of crypto currency trading and exchanging in the country which has gone further down after the crypto world crashed globally recently with many currencies losing chunks of their value, especially Luna which lost almost 100% of its value and ended up being delisted by the Indian exchanges.
The crypto field in India has been in contact with the Indian government to get the 30% tax and the added 1% TDS down so trading the currencies becomes easier and more lucrative which will in turn bring in more Indians in to the world of crypto currencies.
TDS is especially an avoidable issue for all parties as they can be claimed and refunded back during tax filing at the end of the fiscal year.
