How is TDS calculated?
CoinSwitch is an online crypto trading platform that facilitates trade in crypto by way of placing sale and/or purchase orders on behalf of users on third-party crypto exchanges. In case your order is executed on a third-party exchange, we place a buy order on your behalf and credit the VDA (crypto) received to your CoinSwitch account.
Similarly, to sell a VDA (crypto) we use your crypto balance and place a sell order on our own exchange or a third-party exchange. Once the order is executed, we credit your CoinSwitch account in Indian Rupees after deducting a small fee and tax.
Please view the below flow chart on how TDS is calculated.
Please view the following example on 1% TDS calculation on a Sell transaction for your reference.
When the order is executed on our own exchange or an Indian third-party exchange:
The user wants to sell 10 Altcoins. (A)
Price of each altcoin is 20 INR. (B)
CoinSwitch total commission (incl. of discount and exchange fees and GST). (D), say 1 INR.
The gross amount of this trade is (A) x (B) i.e., 10 x 20 = 200 INR. (C)
Net Sale = (C) - (D) = 200 - 1 = 199 INR.
TDS will be applicable on the net sale (i.e., 1% of 199 INR = 1.99 INR). (E)
The actual amount deposited to the user’s account will be: (C) - (D) - (E) = 200 - 1 - 1.99 = 197.01 INR.
1. You can find the TDS deduction details for any transaction in the invoice for that transaction. The invoice can be downloaded from the Order History section of your app. You can read this article on how to download the invoice.
2. Invoices will be generated within 48 hours of trade execution.
What about TDS for coins with less liquidity?
- In rare cases when you have placed a buy order for coins with less liquidity in India, a 1% TDS will be deducted for facilitating the trade through crypto-to-crypto transactions.
- If your transaction involves a TDS deduction, it will be reflected in your invoice.
Is TDS applicable on the coins that I received as coupons/rewards?
For coins received via coupons or rewards:
- TDS will be deducted when you sell those cryptos.
- The TDS breakdown will be available on the invoice.