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

When you trade or sell cryptocurrency, a crypto TDS threshold, the minimum transaction value that triggers tax deduction at source by exchanges or platforms can suddenly appear on your statement. It’s not a fee you choose—it’s a legal requirement in countries like India, where exchanges are forced to withhold a percentage of your gains before you even see the money. This isn’t about guessing taxes—it’s about knowing exactly when and how much gets taken out before you touch your coins.

The crypto tax reporting, the process of documenting crypto transactions for government authorities system ties directly to this threshold. If you trade USDT for Bitcoin, or sell Ethereum for INR, and the value crosses the limit—currently ₹50,000 per year in India—the exchange must deduct 1% as TDS. That’s not optional. It’s built into the platform’s code. And while some users think they can avoid it by using decentralized exchanges, most centralized platforms like Bybit, WazirX, or CoinSwitch already track your total annual volume. You don’t need to file anything extra—the tax is already taken. But you still need to report it correctly on your income tax return, or risk penalties.

It’s not just about big trades. Even small, frequent swaps add up. If you buy $500 worth of tokens every month, you hit the threshold in under a year. That’s why many users don’t realize they’ve triggered TDS until they see less money in their wallet than expected. The TDS on crypto, the automatic tax deduction applied to crypto transactions by regulated platforms applies to both buys and sells depending on local rules. In some places, it’s only on sales. In others, it’s on every trade. And while countries like Japan and the U.S. don’t use TDS the same way, they still track every transaction through exchange reporting. Your activity leaves a trail.

What happens if you ignore it? You might get flagged. You might get fined. Or worse—you might get locked out of your account if the exchange detects mismatched records. The crypto compliance, adherence to government rules for reporting and taxing digital asset activity landscape is tightening fast. Exchanges are now required to share user data with tax authorities. The days of flying under the radar are over. Even if you think your transactions are small, they’re being counted. Every swap, every withdrawal, every conversion.

So what should you do? Track your total volume across all platforms. Know your country’s threshold. Keep records of every transaction—even if the exchange says it’s handled. And don’t assume your wallet or DeFi app will do it for you. Most won’t. The crypto TDS threshold isn’t a suggestion. It’s a rule. And the posts below show exactly how this plays out in real cases—from traders in Iran getting hit with hidden deductions, to users in India confused by sudden wallet reductions, to scams pretending to "refund" TDS that was never taken. This isn’t theory. It’s happening right now, to real people. Below, you’ll find real stories about what happens when crypto meets tax law—and how to protect yourself before it’s too late.