Everything about Crypto Tax which is applicable from 1st April 2022 | Union Budget 2022 | Crypto in India

Finance minister Nirmala Sitharaman announced in the Union Budget 2022 - “any income from transfer of any virtual digital asset shall be taxed at the rate of 30 per cent"

According to the new provision, 30% income tax will have to be paid on the sale of any crypto currency after April 1, 2022. With this rule, the government has indirectly recognized cryptocurrency in India as its income is also considered taxable.

How cryptocurrency assets will be taxed from April 1, we tried to explain in below points  -

1. Flat Tax @30% on Digital Assets: The gain on the sale of cryptocurrency would be taxed at a flat 30% rate (irrespective of your income tax slab). 

2. Example to understand the taxation - If you have purchased crypto for ₹10,000 and sold it for ₹20000, your straightforward gain is ₹10000. 3000/- would be taxed -
Sale consideration ₹20,000
Less cost of acquisition ₹10,000
Taxable gain ₹ 10,000
Total tax on this -> ₹ 3,000

3. TDS on cryptocurrency transactions - @1% TDS has been proposed for transactions involving cryptocurrency. 
for any Buy or Sell transaction 1% TDS will be deducted by the Crypto exchange and will be deposited as per your PAN record.
There is no clarity on TDS done on transaction having LOSS but it should be returned when you claim it in ITR.

4. The provisions related to 1 % TDS (explained above) will come into effect from July 1, 2022, while the gains will be taxed effectively April 1.

5. Crypto Gift is Taxable - If you receive a gift in form of cryptocurrency or any other virtual digital asset like NFT, it will be liable for taxation as a gift.

6. Loss can not be set off against profit - This would mean that loss from the transfer digital assets or crypto will not be allowed to be set off against the income arising from the transfer of asset.

If you have any doubts/ Queries please feel free to ask in below comments, will will try our best to answer all queries.

3 comments:

  1. What about crypto earned from mining, and how the tax will be put on those coins. Pls explain about this also

    ReplyDelete
  2. Inter wallet transfer pe 0%/30% or total 60% tax??

    ReplyDelete

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