In a blog post today, CoinDCX has announced the remittance of TDS 1% on cryptocurrency to the Indian government. According to the 2022-2023 financial budget, it became mandated for every citizen of India to pay a 1% Tax deduction at the source to the Ministry of Finance. In compliance with that, as of November 2022, CoinDCX announced that it remitted about $5 million on behalf of its users to the Finance Ministry.
Further, in the blog post, CoinDCX revealed how the Finance Ministry received about $7.3 million from cryptocurrency exchanges in India. Also, the cryptocurrency exchange emphasised how its customers will always remain a priority. CoinDCX explained further that on their respective dashboards users will see the amount of TDS paid on their behalf.
The cryptocurrency exchange regarded itself as one of the first exchanges to comply with new policies. Additionally, Coin DCX vowed that it will continue to support the Government in a bid to properly regulate the industry. The cryptocurrency exchange said it’s ready to work with relevant government bodies to understand the virtual assets sector in India.
Despite vowing its support for the government, CoinDCX called for the reduction of the TDS rate. The cryptocurrency exchange argued that the reduction of the TDS to 0.01% will aid the sector’s growth. Furthermore, the exchange stressed that Indians that use foreign cryptocurrency exchanges to bypass the tax rate are open to numerous risks. Therefore, CoinDCX urged the government to consider the reduction with the interest of Indians in mind.
Impact of the Tax rate on CoinDCX and other crypto exchanges in India
The imposition of the 1% TDS rate alongside the 30% tax on crypto by the Finance Ministry of India had some negative impacts on cryptocurrency firms in India. Shortly after the implementation of the tax rate around August, Binbits reported how cryptocurrency firms in India experience low trading volume. Among the affected cryptocurrency exchange is CoinDCX.
Meanwhile, the Indian Minister of Finance, Nirmala Sitharamanhas has been vocal in her opposition to cryptocurrency in India. In a bid to rival crypto, the Reserve Bank of India has actively worked to introduce the digital Rupee. The rivalry hasn’t helped the industry to grow as crypto exchanges like CoinDCX are experiencing low patronage.