Namaste Tribe!
As per Section 194S of the Income-Tax Act, 1% Tax Deducted at Source (TDS) applies to the transfer of Virtual Digital Assets (VDAs) when consideration is received.
The applicable TDS must be deducted from the transaction value and paid to the Government.
When TDS Applies to Crypto Transactions
| Transaction Type | TDS Applicability |
|---|---|
| Crypto Trading | When an Indian resident sells crypto for INR or buys crypto using another cryptocurrency, WazirX deducts the applicable 1% TDS on the user's behalf. |
| Crypto Withdrawals/Transfers | TDS applies when cryptocurrency is transferred to another blockchain wallet in exchange for money or any other form of consideration. |
Crypto Withdrawal Requirements
As per Section 5.2(c) of the WazirX Terms of Use, you can withdraw supported cryptocurrencies under the following conditions:
- Withdrawal to Your Own Wallet: You can transfer supported cryptocurrencies to another blockchain wallet owned by you.
- Withdrawal to a Third-Party Wallet: You can transfer supported cryptocurrencies to a third party only if you do not receive money or any other form of consideration in return.
Withdrawal Declaration for Indian Residents
To comply with these requirements, Indian resident users must confirm the purpose of each crypto withdrawal.
A declaration checkbox is displayed on the withdrawal screen. You must select this checkbox to confirm that the withdrawal meets the applicable requirements.
The Proceed with Withdrawal button will be enabled only after you select the checkbox.
Additional Information
For more details on how TDS affects cryptocurrency transactions, refer to TDS on Crypto Trades.