Budget 2022 for Cryptocurrency Investors: If the government does not stop Indians from transacting in cryptocurrencies, it is expected that a regressive tax regime will be introduced for this.
Budget 2022 for Cryptocurrency Investors: India’s cryptocurrency market has seen rapid growth in the last few years. It is estimated that investment by Indians in cryptocurrencies could increase to $241 million by 2030. According to a recent study by Nasscom and WazirX, India currently has the largest number of crypto owners globally, 100.7 million.
Taxmann’s DGM Naveen Wadhwa says, “A bill was expected to be introduced during the winter session of Parliament to regulate cryptocurrency. However, it was not introduced. Now it is expected that the government can introduce this bill in the budget session. If the government does not stop Indians from transacting in cryptocurrencies, it is expected that a regressive tax regime will be introduced for the same.” Taking into account the market size, amount and risks associated with cryptocurrencies, the taxation of cryptocurrencies may be subject to the following changes –
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TDS/TCS Provisions
Tax experts are of the view that both the sale and purchase of cryptocurrencies in excess of the prescribed limit should be brought under the purview of TDS/TCS provisions. This will help the government to keep an eye on the investors.
Transactions mentioned in the Financial Transaction Statement
Both the sale and purchase of cryptocurrencies may be subject to reporting in the Financial Transaction Statement. Trading companies have already been referring to the sale and purchase of shares of mutual funds.
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higher tax rate
Similar to winnings from lotteries, game shows, puzzles, etc., proceeds from the sale of cryptocurrencies should be taxed at a higher tax rate of 30%.
damage not allowed
Losses from the sale of cryptocurrencies should not be allowed to be adjusted against other income and also should not allow a ‘carry forward’.
(Article: Sanjeev Sinha)
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