Indian Compliance & Tax

Does the 1% TDS apply to crypto-to-crypto swaps?

Yes, the 1 percent Tax Deducted at Source (TDS) under Section 194S applies to crypto-to-crypto swaps in India, not only to crypto-for-rupee sales. Because a swap is treated as two transfers, TDS can apply on both legs, since each party is disposing of a Virtual Digital Asset. For example, trading one token for another may see 1 percent deducted on the value of each asset exchanged. The deducted amount is not an extra tax but a prepayment credited against your final liability, which you can reconcile when filing your return.

This is general information, not tax advice. Tax rules change and depend on your individual circumstances — verify the current rules or consult a qualified tax professional before acting.