Last Updated: May 2026 | Applicable: FY 2025-26 (AY 2026-27)
TL;DR
- Under Section 194S, 1% TDS applies on eligible transfers of Virtual Digital Assets, including crypto assets and NFTs.
- TDS is deducted on the transaction value, not on profit. It applies when the relevant annual threshold is crossed.
- For specified individuals and HUFs, the limit is ₹50,000. For other taxpayers, it is ₹10,000.
- On WazirX, TDS is deducted and tracked automatically for eligible trades, and users can verify it through order history, trading reports, and Form 26AS.
What Is TDS on Crypto?
TDS on crypto in India is governed by Section 194S of the Income Tax Act, 1961. It applies when a resident transfers a Virtual Digital Asset, commonly called a VDA, for consideration.
Virtual Digital Assets include crypto assets, NFTs, and other notified digital assets. The Income Tax Department clarifies that crypto assets fall within the VDA framework.
The key point is simple: TDS is not deducted on profit. It is deducted on the transaction value. This means TDS can apply even if a trade results in a loss.
Crypto TDS Rate and Limits in India
| Taxpayer Category | Annual Threshold | TDS Rate |
| Individual or HUF classified as a specified person | Above ₹50,000 | 1% |
| Other taxpayers, including businesses and companies | Above ₹10,000 | 1% |
| User without PAN/ PAN not linked with the Aadhaar | No regular limit benefit | 20% under Section 206AA |
- Specified Person means an individual or HUF whose business turnover does not exceed ₹1 crore, or professional receipts do not exceed ₹50 lakh in the preceding financial year, or someone with no business income at all. Most retail crypto traders fall into this category.
- No PAN on record? TDS is deducted at 20% under Section 206AA. Ensure your PAN is linked to your WazirX account to avoid this.
- Key update for FY 2025-26: Section 206AB, which previously imposed a higher TDS rate on traders who had not filed ITR for two consecutive years, was officially removed from April 1, 2025. A flat 1% now applies to everyone, regardless of ITR filing history.
How Does WazirX Handle Crypto TDS?
The Central Board of Direct Taxes (CBDT), through Circular No. 13 of 2022, clarified the TDS mechanism for transactions involving Virtual Digital Assets. As per the circular, the primary responsibility to deduct TDS is on the buyer. However, a crypto exchange may take up this responsibility through an agreement with its users.
For trades executed on WazirX, this responsibility is handled by WazirX through its User Agreement. WazirX, operated by Zanmai Labs Private Limited, deducts applicable TDS automatically on eligible trades executed on the platform and deposits it with the Income Tax Department.
You can track TDS in two ways:
- Open your completed order history and select the relevant trade.
- Download your trading report and check the Exchange Trades section.
For more details, read the WazirX guide on TDS on Crypto Trades.
You can also refer to this simplified WazirX explainer on TDS on Crypto.
How Does TDS Work on Different Crypto Trades?
Crypto to INR Trades
When you sell crypto for INR, 1% TDS is deducted from the sale consideration if the applicable limit has been crossed.
Example:
If you sell crypto worth ₹1,00,000, TDS of ₹1,000 is deducted. The remaining amount is credited to your account, subject to applicable platform fees and trade settlement rules.
Crypto to Crypto Trades
TDS also applies to crypto-to-crypto trades because one VDA is being exchanged for another.
On WazirX, TDS may be deducted in the relevant crypto asset for crypto-to-crypto markets. WazirX then converts the deducted amount into INR and transfers it to the Income Tax Department.
For example, in MATIC/USDT or ETH/USDT markets, TDS is deducted in USDT from both sides. WazirX will then convert the collected crypto TDS into INR and remit it to the Income Tax Department.
How to Verify Crypto TDS in Form 26AS?
TDS deducted on eligible crypto trades is linked to your PAN and can be checked in Form 26AS.
Steps to verify:
- Visit the Income Tax e-filing portal or https://www.tdscpc.gov.in.
- Log in using your PAN credentials. New users: select “Register as a new user”
- Go to View/Verify Tax Credit.
- Select View Form 26AS.
- Choose the relevant Assessment Year.
- Look for entries under the deductor name Zanmai Labs Private Limited for WazirX-related TDS.
The amount shown under “Total Amount Paid/Credited” represents the gross transaction value on which TDS was deducted. It does not represent your profit, taxable income, or the amount withdrawn to your bank account.
TDS entries may take time to reflect after the relevant quarter ends. Users should recheck Form 26AS after quarterly TDS reporting timelines are completed.
Note on timing: TDS for a financial quarter reflects in Form 26AS typically within 45 to 60 days after the quarter ends. If a recent trade is not visible yet, recheck after the next quarter closes.
Important: The “Total Amount Paid/Credited” shown under Zanmai Labs in Form 26AS represents the total volume of trades where TDS was deducted, not your income or profit. It is the gross transaction value, not taxable earnings.
You can also verify TDS at the individual trade level on WazirX:
- Open completed order history, select any trade, the TDS deducted is shown inline.
- For full history: Account Settings > Download Reports > Trading Report > Enter the timeline > Request Trading Report
Here’s a guide on How To Download The Trading Report On WazirX?
TDS Is Not Your Final Crypto Tax
TDS is an advance tax, not a final tax settlement. Here is how it integrates into your annual filing:
- Crypto gains are taxed at 30% under Section 115BBH (plus 4% cess), with no deductions allowed except the cost of acquisition.
- TDS already deducted is credited against your total tax liability when you file your ITR.
- If your actual tax liability is lower than total TDS deducted, you can claim a refund through ITR.
- Gains must be declared under Schedule VDA in ITR-2 (for capital gains) or ITR-3 (for business income) for FY 2025-26.
- Crypto losses cannot be set off against gains from other asset classes, and cannot be carried forward.
NOTE: In India’s crypto tax framework, TDS under Section 194S and the 30% flat tax under Section 115BBH are separate obligations. TDS is credited against the final liability, and excess deductions are refundable via ITR.
For a detailed breakdown of how gains are calculated, read – A Comprehensive Guide to Calculating Crypto Taxes
FAQs on Crypto TDS in India
TDS is deducted on the transaction value, not profit. Even if a trade results in a loss, TDS may apply once the relevant threshold is crossed.
The standard TDS rate on eligible crypto transfers under Section 194S is 1%. If PAN is not available, a higher rate may apply under Section 206AA.
Yes. Crypto-to-crypto trades are treated as VDA transfers. Since one crypto asset is exchanged for another, TDS can apply.
You can check TDS in your completed order history, WazirX trading report, and Form 26AS under your PAN.
Yes. If your final tax liability is lower than the TDS deducted, you can claim a refund while filing your Income Tax Return.
It shows the gross volume of trades on WazirX where TDS was deducted — not your profit or income. A high figure here does not mean high tax liability.
TDS for a given quarter is deposited and reported after the quarter ends. It typically takes 45 to 60 days to appear in Form 26AS. If it’s within that window, check again later.
No. Section 194S applies only to the transfer of VDAs in exchange for consideration. Moving assets between your own wallets is not a taxable transfer under this section.
Yes. File your ITR with Schedule VDA, declare your actual gains, and the excess TDS is refunded by the Income Tax Department after processing.
Yes. TDS is an advance tax. It is adjusted against the 30% tax liability on your gains when you file your ITR. You pay only the net difference, or receive a refund if TDS exceeds your liability.
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