In barter transactions involving exchange of crypto assets, the obligation is on the transferee to ensure that the taxes applicable are paid by the transferor. In such cases, it can be argued that the transferee has no liability to deduct TDS and is only liable to ensure that the applicable taxes are paid by the transferor before releasing the consideration. Further, in such cases, deduction of tax by the transferee will be a challenge, as the value on which tax needs to be deducted is not clear.
It can be argued that the transferee can meet this obligation by either obtaining a declaration from the transferor or through a certificate issued by a Chartered Accountant.
While exchanging crypto assets, there are two transferors effectively and both the parties are transferring their respective crypto assets. Accordingly, each of the parties (being transferee of their respective assets) will need to ensure that applicable taxes are paid by the other party/transferor.
Source: Barandbench
