TDS is charged for monitoring, not for earning
During the press conference, Nirmala Sitharaman has clarified that she has imposed 1 percent TDS on cryptocurrencies so that the transactions that happen in the crypto world can be monitored. Actually no cryptocurrency regulation system has been made yet so TDS is used.
How will TDS monitor crypto?
TDS means Tax Deducted at Source. This means that the tax is deducted before you have the money. This way, if you made a profit of 1 lakh rupees by selling crypto, then 1 percent of it will be deducted as TDS as soon as it reaches your bank account. You must then pay 30 percent tax on your profit. Because of this 1 percent TDS, the government will know how much you have done in crypto transactions and how much tax liability you have to pay.
‘Cryptocurrency’ is not a currency
Nirmala Sitharaman has said that any currency is considered a currency only when it is issued by the central bank. Apart from this, everything else is not currency in which cryptocurrency also comes. Cryptocurrency is not issued by the central bank, but it is made by individuals. He said the digital currency will soon be issued by the Reserve Bank, whose name will also be decided. At the same time, he said that there will also be a system for regulating crypto, but until the regulation comes, taxation of those who earn from crypto cannot wait.