You must have recently received our email sent on June 21, 2022, titled “TDS Tax Update on Crypto Investments” mentioning about the upcoming changes in our trading policies post the implementation of the TDS rules for Crypto assets as decided by the Government of India.
This post is to further help you understand the implications of these TDS rules on Active/Partially Open/Partially Closed margin trades that have not been fully closed on or before 11:59 PM on June 30, 2022. On such transactions, you will owe 1% TDS to the Government of India in case the position is still open after 11:59 PM on June 30, 2022. Since the trades were executed before the start date of July 01, 2022, we’ll have to account for additional margins to collect TDS on your position.
This will be done as per the following sample calculation:
- We would suggest you keep an additional amount in your base currency wallet (USDT in above example) as per the sample calculation before 10:00 PM on June 30, 2022. Further as an example, in case the trading pair is ETH/BTC, then the margin requirement for TDS should be maintained in your BTC wallet.
- In case you have multiple open margin trades, please maintain an amount equal to the sum of additional margins as calculated above.
- You can also choose to close out your margins before June 30, 2022 in order to avoid exposure to TDS implications.
- The TDS implication has no correlation with the leverage used and is applicable on the total position you’ve taken.
- Please DO NOT add this margin directly to your position. We will automatically absorb the liquidity from your wallet to the position(s).
- Any partially open or non-entered margin position would be liquidated. For example, if you place an order for ETH/USDT for 100 Quantities, but your entry order is executed for 0 or 10 or 20 quantities (less than 100), we will liquidate your entire trade for the partial quantity executed. Since it’s already partially executed, this would essentially mean that your position will not be exited at a loss.
- In case we are not able to block additional margin for compliance on your trades, we might be forced to liquidate your position.
Please note that in case we are not able to collect the TDS needed for the positions at the time of closing, we might connect with you individually to ensure that compliance needs are met.
Your smooth investment experience is our highest priority. In case of any further queries, please reach out to us at Support here.
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