When you buy or sell cryptocurrency, TDS on crypto, a tax deducted at source on digital asset transactions. Also known as crypto tax withholding, it’s no longer just a theoretical rule—it’s active in countries like India, Nigeria, and parts of Europe. Exchanges now automatically pull a percentage from your trade value before you even see the funds. This isn’t about reporting income later—it’s about paying tax the moment the transaction happens.
TDS on crypto directly connects to crypto tax withholding, a regulatory tool used by governments to collect tax before crypto moves out of the system. It’s different from capital gains tax because you don’t wait until year-end to file. The exchange does it for you—on every trade, every airdrop, every P2P payment. That’s why posts about P2P crypto trading in Russia and crypto exchanges that accept Iranian citizens mention compliance risks: if you’re using platforms that don’t handle TDS, you’re on the hook for the full tax later, and penalties can be steep. Meanwhile, crypto compliance, the practice of following tax and reporting rules for digital assets is becoming a non-negotiable part of using any exchange, even decentralized ones. Projects like FLUX Protocol and CrossWallet CWT airdrop now list tax obligations in their terms because they know users can’t afford to ignore them.
What makes TDS on crypto tricky is that it doesn’t care if you made a profit. Even if you trade USDT for a new token that crashes the next day, TDS still applies. That’s why market cap manipulation and TVL manipulation in DeFi are so dangerous—they create fake gains that trigger real tax liabilities. And if you’re in a country like Saudi Arabia, where banks block crypto, but TDS still applies to on-chain activity, you’re stuck between a regulatory rock and a hard place. The same goes for Nigeria, where the SEC now regulates exchanges and taxes kick in from 2026. TDS isn’t just a tax—it’s a control mechanism. It forces transparency, shuts down anonymity, and turns every trade into a paper trail.
So what does this mean for you? If you’re trading on MEXC, Bybit, or even Jupiter DEX, check if TDS is applied. If you’re claiming airdrops like CHY or HashLand Coin, know that the value you receive is taxable—even if the token is worth $0. And if you’re mining altcoins or using DeFi pools, TDS might not be automatic, but the tax still exists. The real question isn’t whether TDS on crypto is fair—it’s whether you’re ready for it. The posts below show exactly how this plays out in real markets: from banned countries to hidden P2P deals, from NFT airdrops to collapsed tokens. You’ll see who’s complying, who’s getting caught, and what you need to do before your next trade.
India taxes crypto at 31.2% with a 1% TDS and 18% GST on exchange fees. No deductions, no long-term discounts. Learn how it works, what's taxed, and how to comply in 2025.
