Tax withholdings

As of July 1, 2022, the India Finance Bill of 2022 requires an exchange to withhold 1% of the transaction value when you sell cryptocurrency (crypto) or engage in crypto-to-crypto transactions. This process is called Tax Deduction at Source (TDS). Coinbase will pay the withheld tax to the India tax department.

The TDS withholding amount will be shared with you in your transaction information.

TDS scenarios

There are a few ways TDS can be applied to you:

Scenario

TDS

Details

Buy crypto with INR

No

 TDS doesn’t apply to a buy transaction for INR

Sell crypto for INR

Yes

 1% of the value of the sell transaction

Crypto-to-crypto transaction

Yes

 1% of the the crypto you’re exchanging

India tax law imposes a higher rate of withholding tax for certain situations when you haven’t provided a Permanent Account Number (PAN) to Coinbase or when you haven’t filed or paid certain prior tax returns.

Claim on income tax return

In general, you can claim a credit on your income tax return with respect to any withheld TDS. Please consult with your tax advisor. 

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