Crypto traders dodging TDS via Binance under I-T lens

Binance have come under the glare of the tax authorities.

Over the past few weeks, the Income Tax (I-T) department has inquired whether the 1% tax deducted at source (TDS) levied on such deals have been collected. Local investors must either provide proof of TDS deduction or submit documentary evidence on why TDS is not applicable to them, according to notices served by the tax office.

Probing into the traders' source of money, the department has sought their I-T returns for the years when the funds used to purchase cryptos were earned. A few scrutiny notices, questioning the transaction data downloaded from the website of the offshore exchange, have imposed 30% tax on the entire turnover instead of claiming tax on the gains.

If the revenue department spreads the net, it could impact many Indians who have over the past two years moved their crypto holdings to wallets with overseas platforms like Binance. Some who have become NRI or migrated abroad have also transferred their crypto wealth from local bourses to foreign exchanges and private wallets by convincing the domestic platforms to allow them to withdraw coins for genuine reasons.

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Vikram Subburaj, founder & CEO of Giottus, a domestic cryptocurrency exchange said, «Well, this was bound to happen sooner or later. Overseas exchanges that bypass the TDS requirements are putting Indian traders in a difficult position. If you want to serve investors in India, you should respect and follow the law of the land. These exchanges might argue that tax