Dear Believers,
In the Union Budget 2022 – 2023, the Hon’ble Finance Minister Smt. Nirmala Sitharaman announced an income tax framework for virtual digital assets (“VDAs”). Section 194S was inserted to the Income Tax Act, 1961 mandating persons purchasing VDAs from Indian residents to undertake tax deduction at source (‘TDS’) at the rate of 1%. Recently, the Hon’ble Minister of State in the Ministry of Finance, Shri Pankaj Chaudhary, in response to certain questions raised in the Parliament, stated that TDS amounting to INR 60.46 crores has been received by the Ministry of Finance under Section 194S. It is pertinent to note that almost all of this collection is through Indian VDA exchanges.
CoinDCX is proud to announce we have successfully conducted TDS deductions on behalf of our users for all subject VDA transfers undertaken on our platform. The interest of our consumers is, and always will be, at the core of our operations. Staying true to our ethos, we were one of the world’s first exchanges to respond to the change in law and calibrate the necessary internal processes so as to ensure that our users are fully compliant with the tax mandate. Details of the TDS paid by users on their transactions is available on their CoinDCX dashboard and credit of such TDS to the users will now be reflected in their tax form 26AS. We made a total payment of INR 41.33 cr. towards TDS under Section 194S for the period till November 2022.
As a leading player in the Indian Web3 and VDA ecosystem, CoinDCX has also always supported the government’s efforts to develop sound and efficient policies for this dynamic, nascent, yet critical ecosystem. In the same vein, when the TDS mandate was announced, we acknowledged and appreciated the government’s effort to track and monitor VDA transactions. Having fully complied with the TDS requirements, we are proud to partner and collaborate with the government in their effort to understand and monitor the VDAs ecosystem.
Notably, through our representation for the upcoming Union Budget 2023 – 2024, we have suggested that the rate of TDS be brought down to 0.01%. This lower rate will help Indian VDA businesses offer competitive prices to Indian VDA users and protect them from exposure to unregulated foreign exchanges.
CoinDCX will continue to go above and beyond and comply with global standards, to run a safe and wholly compliant VDA exchange made in India for Indians. We conduct ourselves so as to provide a positive example, both to other players in the ecosystem, and the government, with the overarching objective of protecting VDA users and developing trust between key stakeholders.
We are confident that with substantive data provided, the Government of India will positively consider our request for reduction of TDS rate.
Regards,
Team CoinDCX
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