A typo error on the Income Tax Department’s website mistakenly altered a 1% tax-deducted-at-source (TDS) figure to 0.1%, and has since been rectified, the Income Tax Department said on Wednesday.
See related article: India’s crypto tax will incur losses for government, says WazirX CEO
- “Some media reports have come to the notice of CBDT (Central Board of Direct Taxes) claiming that the rate of TDS on Virtual Digital Assets (VDA) has been reduced to 0.1%. It is hereby clarified that there is no change in the rate of TDS on VDA, which continues to be 1%,” the government office said on Twitter.
- A 1% TDS on cryptocurrency transactions above Rs. 10,000 (about US$129) is set to be levied from July 1 on top of the 30% flat tax on all crypto income, which kicked in on April 1.
- Trading volumes at India’s major cryptocurrency exchanges slumped to their lowest in years following April 1, according to research by Crebaco.
- A 1% TDS from July 1 on most transactions is expected to drain out liquidity from the market, causing a further drop in trade volumes.
- Smaller exchanges, which depend heavily on volumes of transactions, are likely to be hurt the most after July 1, causing some of them to even close shop.
See related article: Only the big fish will survive as India cracks the whip on crypto: Binance-backed WazirX