What is the 1% TDS?
As per revised Income Tax regulations, the TDS of 1% will be applicable with effect from July 01, 2022, onwards on all sell transactions of crypto assets and NFTs. So, the person selling the crypto asset will be subjected to 1% TDS, which will be deducted from the sell value of their crypto asset.
For instance, if the sell transaction value is INR 100,000, then TDS of INR 1,000 will be deducted and a net amount of INR 99,000 will be paid to the seller.
Here’s the official link to the Income Tax Website. Please refer to Section 194S, which mentions the taxation rules on Virtual Digital Assets: https://incometaxindia.gov.in/communications/circular/circular-no-13-2022.pdf