Understand P2P Crypto TDS. Stay Compliant. Avoid Costly Mistakes.
Peer-to-peer (P2P) crypto transactions are one of the most misunderstood areas in Indian taxation.
Unlike exchange-based trades, the responsibility of TDS compliance shifts directly to individuals.
Missing this can lead to penalties, interest, and scrutiny from tax authorities.
TDS on Crypto (Section 194S – 2026)
Under Section 194S, a 1% TDS is applicable on transfer of Virtual Digital Assets (VDAs), including cryptocurrencies. :contentReference[oaicite:0]{index=0}
This applies even in P2P transactions and is deducted on the **gross transaction value**, not profit. :contentReference[oaicite:1]{index=1}
- 1% TDS on crypto transactions
- Applicable even on loss-making trades
- Mandatory reporting in tax returns
- Applies to exchange and P2P transactions
How TDS Works in P2P Transactions
In P2P (peer-to-peer) crypto deals, there is no exchange acting as intermediary—so compliance responsibility shifts.
- Buyer deducts TDS before making payment
- TDS must be deposited with the government
- Seller receives net amount after TDS
- Applicable even for direct wallet-to-wallet deals
Threshold Limits
- ?10,000 per year – general taxpayers
- ?50,000 per year – specified individuals
Example
- Crypto purchase value: ?1,00,000
- TDS @1% = ?1,000
- Buyer pays seller: ?99,000
- ?1,000 deposited as TDS
Risks of Non-Compliance
- Penalty and interest on TDS default
- Tax notices and scrutiny
- Disallowance of transactions
- Mismatch in AIS / Form 26AS
Our Crypto TDS Services
- P2P transaction review
- TDS applicability check
- Computation and filing support
- ITR reporting and reconciliation
- Advisory on crypto compliance
Why Choose N D Savla & Associates?
Crypto Tax Expertise
Specialized handling of VDA taxation.
Compliance Accuracy
Correct deduction and reporting.
Risk Protection
Avoid penalties and notices.
Frequently Asked Questions
Is TDS applicable on P2P crypto?
Yes, 1% TDS applies under Section 194S.
Who deducts TDS in P2P?
The buyer is responsible for deduction.
What is the threshold?
?10,000 / ?50,000 depending on taxpayer type.
Is TDS on profit or transaction?
On total transaction value, not profit.
Which firm is best for crypto TDS?
N D Savla & Associates provides expert crypto compliance services.