Popular Tax Myth: “No TDS if I trade on foreign exchanges or DEXs.” ❌ Incorrect Under Section 194S, 1% TDS applies to taxable crypto transfers, no matter where you trade. BUT WHAT MOST PEOPLE DON'T KNOW IS👇 ✅ When TDS does apply: There must be a buyer who can deduct 1% TDS from what they pay you. Examples: • P2P trades • OTC deals • Off-market transfers • Any direct buyer to seller transaction where the platform doesn’t handle TDS If the platform doesn’t deduct it, the buyer must deposit 1% TDS against the seller’s PAN once the yearly threshold is crossed. ❌ When TDS does not apply DEX or smart-contract swaps (e.g., ETH → USDT) because: • No identifiable buyer • No PAN • No counterparty • Swap happens against an automated liquidity pool without any contact with the buyer, thus making it impossible for the seller to get PAN or Aadhaar information of the buyer hence making Swaps on DEXs and foreign exchange non applicable for TDS reduction. These swaps still face 30% tax on gains, but no 1% TDS. Example: Swapping ETH→USDT on a DEX for ₹80,000 • 30% tax on profits: ✅ • 1% TDS: ❌ (no info of the buyer)