Starting April 10, 2024, KuCoin users in India will be subject to a 1% tax deducted at the source (TDS) on their transfers of Virtual Digital Assets (VDAs). This new policy comes after the exchange successfully registered with the Indian Financial Intelligence Unit (FIU). In accordance with Indian government regulations, KuCoin will begin implementing this TDS charge.
Compliance with Local Tax Regulations
According to the Indian Income Tax Department’s instructions, KuCoin will withhold and deduct taxes from its users, then proceed to pay the tax amount directly to the appropriate authorities.
BREAKING
KUCOIN will implement a 1% TDS deduction for Indian users from 10 April 2024.
— Sapna Singh (@earnwithsapna) April 8, 2024
In simple terms, this reasoning applies to various trading transactions. For instance, it pertains to selling Indian Rupees for cryptocurrencies, buying and selling different cryptocurrencies, and selling in the peer-to-peer market. However, purchases in the INR/Crypto market will not affect this deduction.
Tax Deduction Criteria and Tracking
For most transactions, the tax deducted at source (TDS) rate is set at 1%. However, there are certain situations where an extra 5% may need to be paid according to section 206AB of the Income Tax Act of 1961. This rule applies when a person has neglected to file their income tax returns for the past two years and the TDS amount in each of those years exceeded ₹50,000.
Traders have the option to examine the previously deducted Tax Deduced at Source (TDS) amounts from their past completed transactions or obtain a comprehensive trade report directly from the exchange. This enables traders to keep accurate financial records and ensures transparency regarding the TDS deduction process.
At the same time, addressing user concerns over privacy and security, KuCoin assures its users that they prioritize the protection of their assets and confidentiality above all else. Additionally, the exchange asserts that it functions as a global offshore platform, adhering to existing international regulations and laws.
Market Response and Exchange Resilience
In India, the implementation of the TDS (Tax Deduction at Source) has generated varying reactions from the country’s user base. While some express apprehension, KuCoin, as an exchange, approaches local tax laws with respect, demonstrating commitment to the regulatory frameworks in the markets it serves. The exchange openly acknowledges that TDS is a crucial measure towards establishing a clear and controlled market for cryptocurrency transactions within India.
Globally, KuCoin faces regulatory hurdles and is working to overcome them. Although allegations of privacy intrusion arose from their FIU registration, the exchange asserts that they have not provided user data to the Indian government.
KuCoin’s Positioning and Regulatory Hurdles
As KuCoin strengthens its presence in India, it simultaneously deals with legal issues in various other regions, such as the United States. Reports suggest that the decrease in Bitcoin and Ethereum reserves at the exchange could be due to the intensifying regulatory pressures and legal scrutiny the platform is facing.
The crypto exchange, KuCoin, is under investigation by the Department of Justice and has a pending lawsuit from the Commodity Futures Trading Commission (CFTC) over its trading activities. Despite these legal challenges, KuCoin remains in operation and adjusts its offerings to comply with evolving global regulatory requirements.
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2024-04-08 22:10