India’s New Crypto TDS Rule 2.0: What Changes on 1 Oct 2025 & How It Affects Every Trader

Vishal Kumar SharmaJuly 22nd, 20255 min read • 👁️ 30 views • 💬 0 comments

India TDS 2.0 crypto rule 2025 – new 0.1 % rate on Bitcoin and altcoins, refund mechanism explained

🌏 India’s New Crypto TDS Rule 2.0: What Changes on 1 Oct 2025 and How It Affects Every Trader

Nothing is certain except death, taxes… and crypto regulations that change faster than a bull-run candle.
— Indian Crypto Twitter, 2025 edition

1. The Headline in 25 Seconds

From 1 October 2025, the dreaded 1 % TDS on crypto sales is being slashed to 0.1 % for most trades, refunds become possible, and every exchange must plug into a government API. If you buy or sell ₹10 000+ of crypto in a year (₹50 000 for businesses), the new rule will touch you.

2. Flashback: Why the Old 1 % Rule Was Hated

Pain PointWhat Happened
Liquidity killerTraders avoided Indian exchanges, volumes fled offshore .
No set-offLoss on SOL couldn’t cancel profit on BTC, tax still due on the gain .
No refundOver-deducted TDS? You could only adjust it against other tax dues, never get cash back.
ComplicatedP2P buyers had to deduct and deposit TDS themselves, most didn’t .

The result: ₹1 200 cr TDS collected vs ₹8 000 cr target .
Clearly, something had to give.

3. TDS 2.0 - The Draft Amendment at a Glance

(Finance Ministry released draft 18 July 2025; public comment open till 30 Sept)

ParameterOld Rule (till 30 Sept 2025)New Rule (from 1 Oct 2025)
Rate1 % of sale value0.1 % of sale value
Threshold (individuals)₹50 000 / yr₹10 000 / yr
Threshold (businesses)₹50 000 / yr₹50 000 / yr (unchanged)
Refund Mechanism❌ Only adjustmentCash refund if excess TDS
Exchange ReportingManual quarterlyReal-time API (Kāveri chain)
Set-off / Carry-forward❌ Not allowedStill NOT allowed (status quo)

4. Real-World Impact: Three Traders, Three Scenarios

Trader A – College Student

  • Buys ₹8 000 ETH in Oct 2025 → No TDS (below ₹10 k).
  • Old rule: would have paid ₹80 TDS.
  • Savings: ₹80 stays in wallet 🎉.

Trader B – Side-Hustler

  • Sells ₹2 lakh BTC in Nov 2025.
  • TDS: 0.1 % × ₹2 L = ₹200 (vs old ₹2 000).
  • Liquidity unlocked: ₹1 800 extra margin.

Trader C – Prop Desk

  • Monthly volume ₹40 lakh.
  • TDS per month drops from ₹40 000 → ₹4 000.
  • Annual working-capital freed: ₹4.32 lakh 💸.

5. The Refund Revolution, How It Works

For the first time, you can get actual cash back:

  1. Excess TDS (e.g., you’re in 0 % slab) appears in Form 26AS via API.
  2. File ITR with Schedule VDA + Schedule TDS .
  3. Refund credited like any other excess TDS, within 45 days if e-verified.

“This single tweak converts TDS from a liquidity choke-hold into a manageable prepayment.”
— CA Sonu Jain, 9Point Capital

6. Exchange & P2P Checklist Before 1 Oct

StakeholderAction Required
Centralised ExchangesIntegrate Kāveri API, Auto-adjust new threshold & rate, Show live TDS break-up on order screen
P2P PlatformsPush new TDS rate in smart contract escrow, Add 0.1 % TDS line-item in invoices
TradersUpdate KYC PAN seeding (for refund routing), Download trade P&L before 30 Sept for old-rate reconciliation

7. Step-by-Step Refund Walk-Through

1. Log in to your exchange API dashboard → Export FY 2025-26 trades CSV
2. Import into KoinX / Cleartax Crypto (or any SFT-compliant tool)
3. Tag transactions with new 0.1 % TDS
4. File ITR-2/3 before 31 July 2026
5. Claim excess TDS in “Schedule TDS” → Refund hits bank in ~45 days

8. Frequently Asked Questions (FAQ)

Q1: I trade on Binance; does the new rate apply?
A: Yes, if the counter-party is an Indian resident or the platform serves Indian users. TDS is location-based, not exchange-based.

Q2: Can I finally offset BTC losses against ETH gains?
A: No. Section 115BBH still prohibits set-off . The amendment only tweaks TDS, not the 30 % tax or loss rules.

Q3: What if I forget to claim the refund?
A: You have until 31 March 2027 to file a belated return under Sec 139(4) . After that, the money lapses to government.

9. Bottom Line, Should You Cheer or Fear?

CheerFear
90 % cheaper TDS → better liquidityStill 30 % flat tax + 4 % cess
Cash refund for low/no-tax tradersReal-time API = more scrutiny
Smaller traders below ₹10 k exemptLoss set-off still banned

Net verdict: The rule is friendlier, but compliance is tighter. Treat it as a nudge to trade smarter, not harder.

📌 Ready-to-Use Resources

  • Download PDF Cheat-Sheet: https://www.multigyan.in/tds-2-0-cheat-sheet (Coming Soon)
  • Google-Sheet Calculator: Make a copy → plug your FY 25-26 trades (Coming Soon)
  • Set calendar reminder: 1 Oct 2025 – new rate kicks in!

Disclaimer: This article is for educational purposes only and does not constitute financial or tax advice. Consult your CA for personal situations.

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