I trade crypto on an Indian exchange and on Binance. How is it taxed, who deducts the 1% TDS, and can I set off losses?

Computation: income from each transfer of a virtual digital asset is sale price less cost of acquisition only; no expenses, no exchange fees, no indexation. Losses on one coin cannot be set off against gains on another, cannot be set off against any other income, and cannot be carried forward. So you pay 30% on the full ₹3 lakh (₹90,000 plus cess) and the ₹1.8 lakh loss is simply lost. Coins received from airdrops or staking are taxed at slab rates as income on receipt, and then at 30% on the gain when sold.

TDS: section 194S requires the buyer to deduct 1% on payment for a VDA above ₹10,000 a year (₹50,000 for small individuals). On an Indian exchange the exchange deducts and reports it; it appears in your Form 26AS and is credited against the 30%. On Binance or any foreign or peer-to-peer platform the obligation falls on the buyer, which means you when you buy: deduct 1%, deposit it through challan-cum-statement Form 26QE within 30 days of the month end, and be ready to show it.

Reporting: Schedule VDA in ITR-2 (or ITR-3 if you treat it as business), listing every transfer with dates, cost and consideration. If you are an ordinarily resident, coins held on a foreign exchange go into Schedule FA as a foreign asset.