🌏 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 Point What Happened Liquidity killer Traders avoided Indian exchanges, volumes fled offshore . No set-off Loss on SOL couldn’t cancel profit on BTC, tax still due on the gain . No refund Over-deducted TDS? You could only adjust it against other tax dues, never get cash back . Complicated P2P 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) Parameter Old Rule (till 30 Sept 2025) New Rule (from 1 Oct 2025) Rate 1 % of sale value 0.1 % of sale value Threshold (individuals) ₹50 000 / yr ₹10 000 / yr Threshold (businesses) ₹50 000 / yr ₹50 000 / yr (unchanged) Refund Mechanism ❌ Only adjustment ✅ Cash refund if excess TDS Exchange Reporting Manual quarterly Real-time API (Kāveri chain) Set-off / Carry-forward ❌ Not allowed Still 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 : Excess TDS (e.g., you’re in 0 % slab) appears in Form 26AS via API. File ITR with Schedule VDA + Schedule TDS . 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 Stakeholder Action Required Centralised Exchanges Integrate Kāveri API , Auto-adjust new threshold & rate, Show live TDS break-up on order screen P2P Platforms Push new TDS rate in smart contract escrow, Add 0.1 % TDS line-item in invoices Traders Update 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? Cheer Fear 90 % cheaper TDS → better liquidity Still 30 % flat tax + 4 % cess Cash refund for low/no-tax traders Real-time API = more scrutiny Smaller traders below ₹10 k exempt Loss 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.