Cryptocurrency exchange Bitbns has announced zero tax deduction at source (TDS) for its users who have invested in systematic investment plans (SIP). This development comes as crypto investors disappear from Indian crypto exchanges post July 1, after the crypto TDS (tax) was implemented.
Crypto SIP is similar to regular SIP in mutual funds, allowing one to invest a fixed amount in crypto at regular intervals. Investors can avail themselves of daily, weekly, or monthly instalments based. The SIP route enables investments as low as Rs 75 while automating and scheduling regular purchases of popular crypto-assets such as Bitcoin and Ethereum, among others.
According to Bitbns, the initiative aims to remove the taxation burden from the back of the investors while encouraging them to undertake SIP to leverage the benefits of rupee cost averaging to counter volatility.
“Investors availing of SIP for a minimum period of 12 months can now invest seamlessly without worrying about paying the TDS,” the company said in a press release. While there is no minimum tenure for redemption “Bitbns will bear the TDS for SIP investments redeemed after 12 months,” the company added.
As per the new taxation rule, effective July 1, all cryptocurrency transactions will attract 1 per cent TDS. While the TDS in direct selling will be borne entirely by the seller, in the case of trading one cryptocurrency for another, TDS will be taxed upon both the parties involved.
“A SIP approach would be ideal as it is one of the best and most efficient investment strategies. Regular and timely purchases enable an investor to avail a better price point for entry even amid high volatility. Our TDS-free SIP plans will encourage investors to avail the benefits of an efficient wealth creation model while evading the burden of TDS. In addition to risk mitigation, it will also aid in portfolio diversification and reinvestment of returns, to leverage the power of compounding and generate attractive yields through long-term lock-in of investments,” said Gaurav Dahake, Founder and CEO of Bitbns.
