Why do you need to provide the crypto withdrawal declaration?

블록스트리트 등록 2022-07-19 15:22 수정 2022-07-27 20:01

As per section 194S of the Income-Tax Act, 1% tax as TDS will have to be deducted before any consideration is paid for the transfer of Virtual Digital Assets (VDA). Here, you as an Indian Citizen (or the Exchange facilitating this transaction) will have to deduct and withhold 1% of the transaction value as TDS. This withheld Tax will have to be further paid to the Government.

 

Therefore according to the new regulations:

  • For any type of trade on the WazirX exchange where a WazirX user who is an Indian resident sells crypto for INR or buys crypto by paying another crypto, WazirX is liable to deduct TDS on the user's behalf.
  • Any crypto withdrawals/transfers from the WazirX wallet to a blockchain wallet against which a user takes money or any other form of consideration in return for this withdrawal will also attract TDS.

So, if you withdraw crypto from your WazirX wallet to transfer it to another blockchain wallet, as per regulatory requirements, WazirX needs to seek your confirmation that the destination wallet is your own or that of an Indian third party and you have not received money or any other form of consideration in return for this transfer. 

In view of the above, we have amended our Terms of Use policy to accommodate the new regulations, and according to section 5.2(c) of the policy, you as a WazirX user shall:

  • Either withdraw supported cryptocurrencies from WazirX wallet only to another blockchain wallet owned by you
  • Or, if you withdraw supported cryptocurrencies from WazirX wallet to a third party, you shall not receive any money or any other form of consideration for such transfer.

In this regard, for Indian resident users in specific, to seek your explicit confirmation on every withdrawal transaction, you’ll find a declaration checkbox on the withdrawal screen. Only once you tick the checkbox will the ‘Proceed with Withdrawal’ button be enabled.
Please note that this declaration doesn’t apply to others and hence they will not see this checkbox.

 

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To know the impact of TDS on Crypto transactions, you can refer to this article: TDS on Crypto Trades