TDS guide
1% TDS on crypto: how it works and how to get it back
When you sell or swap crypto, 1% of the sale value is deducted as TDS. It isn't an extra tax. It's an advance payment that counts toward your final crypto tax, and you can get it back if you've overpaid.
Who deducts it
- Indian exchange: the exchange deducts 1% automatically and deposits it with the government in your PAN.
- Peer-to-peer or direct deal: the buyer (the person paying) is responsible for deducting 1% before paying you.
- Foreign exchange: usually nothing is deducted, but you still owe the tax and must report the trades.
SourceIncome Tax Dept, s.194S, DisyTax, crypto TDS, TDSMAN, Section 393(1).
Example
You sell Bitcoin worth ₹80,000 on an Indian exchange. The exchange deducts ₹800 and credits you ₹79,200. That ₹800 appears in your Form 26AS and is credited when you file your ITR. Check any amount with the quick TDS check.
SourceDisyTax, crypto TDS. Example figures follow the 1% rate.
Thresholds
| Who is paying | TDS applies once the year's payments cross |
|---|---|
| "Specified person": most individuals and HUFs without business income, or below audit limits | ₹50,000 |
| Everyone else | ₹10,000 |
These are the thresholds under Section 194S of the 1961 Act. From 1 April 2026 TDS on crypto is under Section 393(1) of the Income-tax Act, 2025 at the same 1% rate. Some commentators read the new Act as changing how thresholds apply, so confirm the current position with your CA or exchange for FY 2026-27 trades.
SourceCryptact, 194S thresholds, TDSMAN, Section 393(1), TaxGuru, 1961 vs 2025 Act.
Losses and TDS refunds
TDS is deducted on the sale value, even if you sold at a loss. If your total crypto tax for the year is less than the TDS deducted, claim the difference as a refund in your ITR. This is the most common reason crypto investors are owed money back.
SourceTaxGuru, VDAs AY 2026-27, Cryptact, 194S thresholds.
Common mistakes
- Not claiming TDS shown in Form 26AS, which means paying twice.
- Claiming TDS that isn't in Form 26AS yet. Wait for it to appear, or ask your exchange.
- Treating TDS as the full tax. TDS is 1% of sales; the tax is 30% of gains plus cess.
Want your TDS matched automatically?Crypto tax software reconciles exchange TDS with your trades. Affiliate link.
Try crypto tax softwareFrequently asked questions
What is the TDS rate on crypto in India?
1% of the sale value. It applies when you sell or swap crypto, and it counts toward your final crypto tax.
Who deducts TDS on crypto?
On Indian exchanges the exchange deducts it automatically. In a peer-to-peer deal, the buyer must deduct it before paying the seller.
Is TDS deducted even if I sell at a loss?
Yes. TDS is based on the sale value, not your gain. If your total crypto tax is lower than the TDS deducted, claim the difference as a refund in your ITR.
What is the TDS threshold on crypto?
Under Section 194S, TDS applies once a year's payments cross ₹50,000 for specified persons (most individuals and HUFs) or ₹10,000 for others. From FY 2026-27 TDS sits under Section 393(1); confirm how thresholds apply with your CA.
Where can I see the crypto TDS deducted from me?
In Form 26AS and your Annual Information Statement (AIS) on the income tax portal. Claim it in your ITR so you don't pay twice.
Sources
We check our explanations against these. Credit to the original publishers.