Crypto TDS Threshold: What It Means and How It Affects Your Trading

When you trade cryptocurrency, crypto TDS threshold, the income tax rule that requires exchanges to deduct tax at source when trading exceeds a certain amount. Also known as Tax Deducted at Source on crypto, it’s not a fee—it’s a government-mandated tax collection point built into your trades. If you’re buying or selling crypto on a regulated exchange, you might see a small amount taken out before your funds arrive. That’s TDS. It’s not optional. And it’s not just India—other countries are starting to follow similar rules.

Most people don’t realize crypto taxation, the system governments use to track and collect taxes on digital asset transactions is changing fast. In 2025, countries like India, Australia, and the UK now treat crypto trades like stock trades: every sale above a certain value triggers a tax deduction. The TDS on crypto, the automatic tax withheld by exchanges when you sell or trade digital assets usually kicks in at 1% of the transaction value. That means if you sell $10,000 worth of Bitcoin, $100 gets taken out before you see your cash. You still owe income tax later, but this is just the first step.

Here’s the catch: TDS doesn’t apply to peer-to-peer trades, wallet-to-wallet transfers, or using crypto to buy goods. But if you’re using Binance, CoinSwitch, or any exchange registered under local tax laws, they’re required to collect it. Many traders get caught off guard because they think they’re just "moving crypto"—not realizing selling it for fiat triggers a tax event. And if you’re in a country where crypto is legal but unregulated, you might still be forced to pay TDS if you use a global exchange with local compliance obligations.

What does this mean for you? First, track every trade. Second, save your TDS receipts—they’re your proof of payment when you file annual taxes. Third, don’t assume your exchange will handle everything. Some platforms only report to tax authorities if you hit the threshold, but you’re still responsible for reporting all gains. And if you’re using DeFi protocols like Uniswap or SithSwap, TDS doesn’t apply there… but you might owe capital gains tax anyway.

There’s no way around it: crypto isn’t tax-free anymore. The crypto TDS threshold is just the beginning. Governments are building systems to track every transaction, and exchanges are forced to comply. Whether you’re trading Bitcoin, swapping tokens on BSC, or holding fan tokens like TRA, you’re now part of a financial system that demands transparency. The posts below show you exactly how this plays out across different countries, exchanges, and token types—and what you can do to stay ahead without getting fined or flagged.