Cryptocurrency investors in India will have to pay tax under the new scheme for Taxation of Virtual Digital Assets from April 1
FM Sitharaman said that the scheme would not allow any deduction in respect of any expenditure or allowance while computing such income except cost of acquisition
Further she said, loss from transfer of virtual digital asset cannot be set off against any other income
Gift of virtual digital asset is also proposed to be taxed in the hands of the recipient, she said.
Tax Deducted at Source (TDS) on payment made in relation to transfer of virtual digital asset at the rate of 1 per cent of such consideration above a monetary threshold.
From April 1, a 30 per cent I-T plus cess and surcharges will be levied in the same manner as it treats winnings from horse races
One per cent TDS on payments towards virtual currencies beyond Rs 10,000 in a year and taxation of such gifts in the hands of the recipient
The threshold limit for TDS would be Rs 50,000 a year for specified persons, which include individuals are required to get their accounts audited under the I-T Act.
The provisions related to 1 per cent TDS will come into effect from July 1, 2022, while the gains will be taxed effective April 1.
Taxation of cryptocurrencies by disallowing set off of any losses with gains from other virtual digital assets.
As per the amendments to the Finance Bill, 2022, circulated among the Lok Sabha members, the ministry proposes to remove the word
This would mean that loss from the transfer of virtual digital assets (VDA) will not be allowed to be set off against the income arising from the transfer of another VDA
According to the Finance Bill, 2022, a VDA could be a code or number or token which can be transferred, stored or traded electronically
The VDAs will include prevailing cryptocurrencies and non-fungible tokens (NFTs) which has gained fad over the past couple of years.
How Crypto Investing Work
Is crypto a good investment?