Budget 2022-23Finance Minister Nirmala Sitharaman on Tuesday announced imposition of tax on transactions of virtual digital assets like bitcoin and ethereum. You can also call it ‘cryptocurrency tax’ in a way. Presenting the budget, the Finance Minister has also said that the Reserve Bank of India (RBI) will soon launch its own digital currency.
The long-running speculation about cryptocurrencies has also stopped with the announcement of Nirmala Sitharaman, in which it was being said that the government may ban cryptocurrencies. Finance Minister Nirmala Sitharaman said in her budget speech that income from transfer of any virtual digital asset will be taxed at 30%. At the same time, he also declared that the loss arising from the sale of digital assets cannot be compensated by other income.
Indians have deposits of 40,000 crores in cryptocurrencies
According to crypto industry experts, there are estimated to be around 15 to 20 million crypto investors in the country, with total crypto holdings of around Rs 40,000 crore ($5.37 billion). There is no official data available on the size of the Indian crypto industry.
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Let us know how this tax imposed on cryptocurrencies will affect investors and what is its meaning-
The Finance Minister said in his budget, “There has been a phenomenal increase in the transactions related to virtual digital assets. It has become necessary that special tax system will be implemented. Keeping this in mind, I propose this That the income from transfer of any virtual digital assets will be taxed at the rate of 30 per cent.
It is to be noted here that like equity market, there is no provision of different tax on any kind of short-term or long-term holding. If you sell cryptocurrencies immediately or after a few years, you will have to pay a tax of 30 percent on the total income from it.
Explain that income from lotteries, game shows, quiz etc. is also taxed at the rate of 30 percent and the government has decided to tax the income from crypto at the same rate.
Apart from this, the Finance Minister has announced to levy 1 percent TDS on the transfer of virtual assets on payments made above a certain limit.
Also, virtual digital assets received as gifts will also be subject to tax and the recipient will have to pay tax.
The Finance Minister said that apart from the cost of acquisition, no deduction will be available on any amount spent on virtual assets. Nor can it be shown as a set off against any other income loss.
A tax expert said, “The government has cleared the way for cryptocurrencies in the country by imposing tax on virtual assets. At the same time, it is also a sign of giving this legal recognition. This will strengthen the sentiment of investors and exchanges in the crypto industry. Although the tax proposal proposed by the government is a bit tight, it suggests that the government is still looking at it largely as speculation income. It is expected that it will gradually increase in the coming times. a change is Gonna Come.”
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