New TDS rules around Crypto. What does it mean for you?

Hey Unocoiner,

As you are likely aware, Tax Deduction at Source or “TDS” will be applicable on the transfer of “Virtual Digital Assets”, including crypto assets, from 1 July 2022, as per Section 194S of the Income-tax Act. To help make your trading experience as simple and stress-free as possible, Unocoin has jotted down every pointer that you need to know about the upcoming changes.

For anyone, one of the two TDS slabs applies to their crypto-asset transfer. The reader/Unocoiner can select one of the below slabs they fall into and change it in their User Settings in the app or website.

a) 1% if the user has filed Income Tax Returns for the last two years; or

b) 5%, if the user has not filed Income Tax Returns in at least one year of the last two years and has TDS deductions of equal to or more than INR 50,000 in at least one year (of the last two years).

For explanation purposes below, we consider that you fall under the 1% TDS bracket.

Few pointers:

  1. The TDS only applies if your total/cumulative/aggregate trades for TDS cross INR 10,000 in the financial year. (Explained with an example at a later stage)
  2. The TDS amount will be deducted by Unocoin from your trade value and deposited on your behalf.
  3. As per TDS guidelines, Unocoin will deduct the applicable percentage on both Sell and Buy orders for Crypto-to-Crypto transactions.

Within the prescribed timeline of TDS return filing, the deducted TDS amount will reflect in your Form 26AS. Readers/Unocoiners can claim this tax from the Income Tax department while filing their yearly Income Tax Return.

When is TDS applicable?

– INR-to-Crypto (Fiat to Crypto or F2C) Buy Orders — There is no TDS which is applicable

– Crypto-to-INR (Crypto to Fiat or C2F) Sell orders — 1% TDS applicable on the net order value

– Crypto-to-Crypto (C2C) Both Buy and Sell Orders — 1% TDS applies to the net order value.

Let us simplify this for you.

Example 1: Your trade is less than or equal to INR 10,000 in a financial year — No TDS deduction is applicable.

Sell Trade 1 of INR 10,000 — NO TDS applicable.

Order value = INR 10,000

Unocoin’s transaction fees (0.3% of INR 10,000) = INR 30

GST on transaction fees (18% of 0.3% of INR 10,000) = INR 5.4

Total receivable = INR 10,000 — (INR 30 + INR 5.4) = INR 9,964.6

Hence, TDS is not applicable.

When your subsequent Sell order adds to your previous Sell order(s) to make the total Sell order in a financial year more than INR 10,000:

Sell Trade 2 of INR 5,000 (in the same financial year) — TDS now applicable.

Order value = INR 5,000

Unocoin’s transaction fees (0.3% of INR 5,000) = INR 15

GST on transaction fees (18% of 0.3% of INR 5,000) = INR 2.7

Proceeds = INR 5,000 — (INR 15 + INR 2.7) = INR 4,982.3

TDS applicable (1% of (INR 9,964.6(Previous trade)+ INR 4,982.3)) = INR 149.46

Final calculation (Actual receivable amount) = INR 4,982.3 — INR 149.46 = INR 4832.84

All the subsequent trades hereafter will have regular 1% TDS till the end of the financial year.

Example 2: When your first Sell order is more than INR 10,000

Sell Trade 1 of INR 20,00,000 — TDS applicable.

If you place a Sell order for 1 BTC at INR 20,00,000, your order information will look something like this:

Order value = INR 20,00,000

Unocoin’s Transaction fees (0.3% of INR 20,00,000) = INR 6,000

GST on Transaction fees (18% of 0.3% of INR 20,00,000) = INR 1,080

TDS applicable = 1% of net order value, that is, 1% * (INR 20,00,000 — INR 6,000 — INR 1,080)) = INR 19,929.20

Final calculation (Actual receivable amount) = INR 20,00,000 — (6,000 + 1,080 + 19,929.80) = INR 19,72,990.80.

Crypto-to-Crypto trades: The TDS applies for both Buy and Sell transactions between one crypto and another crypto conversations.

What should you do now?

As a Unocoiner,

1. Please open Unocoin’s app and click on More.

2. Go to the User Settings section to find the new icon.

3. Select the appropriate tax slab you fall into. By default, the 1% slab would be selected.

What’s More?

  1. All Sell open orders on the exchange will be cancelled for all users.
  2. All forms of transactions that will be executed, including exchange orders, will attract TDS from 1 July 2022.
  3. Users can find the information about their TDS in the invoices provided by Unocoin that gets generated within 48 hours of the trade.
  4. Please note that Unocoin (Website and Application) shall be under maintenance from 30 June at 10:00 PM IST until 30 June at 11:59 PM.

New coins on Unocoin

Unocoin has been the pioneer, but to be the best requires continual efforts. Unocoin has made sure that it strives to be the best crypto exchange. To keep up with its brand value, Unocoin: Crypto Ka Super App has developed multiple advancements in the past weeks.

With Unocoin, Indians can trade more than 88 crypto assets with a few taps. As per the timelines, on March 3rd – Solana (SOL) coin got listed on Unocoin, followed by the release of Algorand (ALGO) and Polkadot (DOT) coins on March 7th. Just in the next week, on March 16th, FTXToken (FTT) coin was listed, followed by Lepasa (LEPA) coin released on March 21st.

On March 28th, Enjin (ENJ), Decentraland (MANA), and SushiSwap (SUSHI) got listed on Unocoin. The internal team enabled the (Shiba Inu) SHIB -INR exchange pair. Shiba INU and Dogecoin are the two most popular meme coins extensively traded at Unocoin.

Unocoin welcomed the new financial year by hosting more coins on its platform. On April 6th, ApeCoin (APE), BNB, Compound (COMP), and Tezos (XTZ) coins were launched, followed by WAVES coin being listed on April 11th, TRON (TRX) on April 12th, and Audius (AUDIO), (Balancer) BAL and TONCOIN (TON) being listed on April 18th.

The latest addition to the crypto coins list is Avalanche (AVAX), Axie Infinity(AXS), Chiliz(CHZ), Terra (LUNA) and Zcash (ZEC). Also, the Zilliqa (ZIL) will support only Binance Smart Chain (BSC).

As of April 27th, the ZEC withdrawal is also enabled. For May 2022, CAKE, FIL, VET, Livepeer Token(ERC20), Flow Token (ERC20), and Helium (BSC) are listed, making the total number of coins to be 88 in total.

Guideline for listings of Coins, Tokens and Projects on Unocoin

At Unocoin, we strive to deliver the best crypto buying and selling experience to our Unocoiners. As the industry grows fast and unique, great projects bring significant changes. We want our tribe to invest in the best for their future – the future they believe in. We want to make sure Unocoin is that one platform for all your crypto investments.

As a crypto exchange, we advocate for decentralised, distributed and open blockchain projects. Our platform is built for anyone who wishes to list their project on Unocoin – anyone who believes in the future of a better financial system. That being said, with the growing number of crypto-related products emerging now and then, we usually include them on our platform. We want to enable our community members to explore multiple assets. Hence, we suggest crypto token generators and miners to list their crypto projects.

Here are some of the criteria we checklist while listing assets, tokens, coins, and projects on our exchange. However, the pointers are not just limited to these.

Token publishers must:

  • Have a viable product. 
  • Have an official authentic whitepaper. 
  • Be listed on major crypto data platforms like CoinMarketCap, CoinGecKo.
  • Have a user/community-based adoption. 
  • Have non-anonymous founders and team members.
  • Have a great team actively working on the project. (Active social media).
  • Have a proper project road map. 
  • Have a public tokenomics and vested interest of founders and team members.

Token publishers can also have an open-source code on a platform like Github. This is, however, optional.

While these are a few checklists we want to maintain while listing any projects, we also examine the extent of community adoption and authenticity of a project.

For any request to list your crypto project, please write to us at [email protected].

 

Thank you

INR 100 worth of BTC for free – No questions asked!

Unocoin has got you an offer this new financial year like no other! For every new user sign-up, you get INR 100 worth of bitcoin credited to your wallet as a welcome bonus. There is no better chance to start your crypto journey. The offer is still valid.

What is more:

  1. Refer your family to join Unocoin using your unique referral code. They get INR 100 worth of BTC for free on their sign-up + You get 15% of the transaction fee on every transaction they make.
  2. INR 100 worth of BTC for each sign up means INR 500 worth of BTC for a family member of 5. Sharing is caring. Grow your network.
  3. No need to
  • apply or redeem a coupon, or
  • pay the additional cost or
  • go through the lengthy online process or
  • stand in a queue or
  • go through the time-consuming documentation!

Get your verified Unocoin account now!

#CelebrateBitcoinWithUnocoin

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Disclaimer:

Crypto products are unregulated as of this date in India. They could be highly volatile. At Unocoin, we understand that there is a need to protect consumer interests as this form of trading and investment has risks that consumers may not be aware of. To ensure that consumers who deal in crypto products are not misled, they are advised to DYOR (Do Your Own Research).

 

Crypto bits from Budget speech 2022-23

 

The Budget 2022 has given more light to the grey area of crypto space and India has taken a view that we want to treat it like assets and not like currency, so that it’s very obvious that any kind of transfers from one person to another is taxable. When it comes to such transfer of assets including sale of cryptos, income taxes are levied. This section of the Budget will be applicable for all sorts of Digital Assets and NFT’s.

  • 30% taxes applicable on profits from trading in crypto.

Profits made at the sale of crypto or NFTs will be taxable at 30% tax without any deductions or exemptions. It would no longer be considered as Short Term or Long Term Capital Gains. There is no minimum profits provided for exemption, no matter how small the profit is, it will be taxable under the 30% slab.

  • 1% TDS in order to record and monitor transactions

All the transactions will be taxed 1% as TDS. This is the Government’s approach to monitor all transactions happening in crypto space. This approach might prove to be slightly drastic for intra-day traders as they buy and sell on the same day and do multiple such transactions. The same traders will also be liable to pay 30% taxes on profit as well. This will also have its effect on the volume of transactions happening in crypto space within India. For the days to come, it might be a bad move from the government’s side to impose such high TDS, given some people are doing the transactions for small profits, especially for intra-day traders and short term investors. 

  • Gits will be taxable as well.

The gifts given to family or others were not taxable for fiat or any traditional asset, but when it comes to crypto, the crypto gifts will be considered for taxes and the recipient will be liable for taxes. It is unclear as to if the recipient should pay taxes considering the acquisition cost of those assets or if the entire amount becomes taxable.

  • The losses of crypto trading cannot be offset by profits from other sources or the other way around.

The profits earned through crypto will be taxable without any exemption, but in case of loss in crypto, such losses cannot be offset through profits from other sources and vice versa. The losses in trading from crypto cannot be carried forward as well to the next financial year to be exempted from profits earned in the next year. 

To make it more simple to understand the new tax rules, let’s take a look at the below example,

So far, it was falling in the same income tax slab of taxation starting from the income of 5 Lacs p.a. Because if a person’s income is 4.5 Lakhs, and the profits they made out of crypto is 60k, the total taxable income would be 5.1 Lacs and it would be as per income tax slabs.

But with the new tax regine in place, the 60k profit from crypto would get taxed directly at 30% followed by the normal slab based taxes for the person’s income of 4.5 Lakhs.

There are multiple factors and very minute details that need to be considered and it might be more difficult to file the taxes especially for intra-day traders considering the new TDS in place. Some relief was expected from this budget, but the high TDS and such high taxes of 30% might make people to be more cautious when they trade crypto, and at the same time, India is moving forward to the regulations in crypto space making us one of the first to have regulations. These regulations might seem a little heavy on taxpayers, but it also indicates how volatile the crypto market is. It’s high time for us to see how people react to it and it would be interesting what the future of Indian crypto space will be like.