This is how crypto DTS should be spent.

The 30% tax on cryptocurrency came into effect on April 1, according to a federal budget report last February. It was later announced that a tax of up to 1% on DTS would be levied on cryptocurrencies.

The 1% DTS deduction tax on crypto has been in effect since July 1, according to a federal budget report.

The Income Tax Department clarified on Tuesday that buyers must deduct 1 percent tax on peer-to-peer transactions of virtual digital assets (VDA).

Both the buyer and the seller have to pay taxes on all transactions involved at the same time as the transfer of one tangible asset to another.

“Therefore, in a peer-to-peer manner (i.e. buyer from seller without going through a transaction) the buyer (i.e. the person who pays for it) must deduct 1% tax under Section 194S of the Tax Act,” the Central Board of Direct Taxes said.

Eg: When a person exchanges virtual digital asset “A” with another VDA “B” 1% tax is to be deducted CBDT said that 1% TDS will be deducted from both buyer and seller.

It also clarifies that 1% DTS will be levied on both the buyer and seller for person “A” and the seller for “B” and the buyer and seller for “A” respectively.

So total 1% TDS will be deducted from all the people who buy and sell and engage in crypto transactions.

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