DeFi & Yield

Is 1% TDS applicable to DeFi swaps and yield in India?

The 1% TDS under Section 194S applies to the transfer of virtual digital assets in India, and on-chain DeFi swaps that exchange one token for another generally fall within the definition of a taxable transfer. Because DeFi transactions often have no centralized intermediary, the deduction and reporting responsibility can shift to the participant, which complicates compliance. For example, swapping ETH for a stablecoin on a decentralized exchange can trigger TDS on the value transferred. The practical application to DeFi is still developing, so verify your obligations with a qualified tax advisor before relying on any single interpretation.

Crypto investments are subject to market risk and volatility. Past performance is not indicative of future returns. This is general information, not investment advice — consider your own circumstances or consult a qualified adviser before investing.