In the budget of the financial year 2023, Finance Minister Nirmala Sitharaman has made a provision to levy tax on digital assets at the rate of 30 percent (cess and surcharge in addition).
ITR For Crypto Currency, NFT Income in FY 2022-23: In the budget of the financial year 2023, Finance Minister Nirmala Sitharaman has made a provision to levy tax on digital assets at the rate of 30 percent (cess and surcharge in addition). According to Revenue Secretary Tarun Bajaj, next year there will be a separate column in the ITR form in which taxpayers will be able to disclose earnings from crypto and other virtual digital assets. This income will be taxed in the same manner as other speculative transactions like horse racing. No deduction or allowance will be available on these and the loss cannot be set off from the income from other sources. Five things crypto investors should know-
Tax provision on crypto is not new
According to Bajaj, the proceeds from crypto and other Virtual Digital Assets (VDAs) were always taxable and taxpayers had to show it as income from other sources in the ITR. Now what has happened is that certainty has been brought in the budget regarding this issue. However, according to Bajaj, the provision of the budget has nothing to do with its validity and the situation can be decided only when the bill comes in the Parliament.
Work continues on cryptocurrency bill
The government is preparing a bill to regulate transactions in crypto. However, so far no draft of the proposed bill is in the public domain.
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Cryptocurrency not yet legal in India
The imposition of a tax rate of 30 per cent on income generated from cryptocurrencies has created an impression in the minds of people that it has been legalised. However, Finance Minister Nirmala Sitharaman has clarified the position regarding this that it has not been legalized in the country yet. In such a situation, investors should not think that crypto is legal as an asset class in India.
provision of TDS
The government has proposed TDS (Tax Deducted at Source) on payments made for crypto transfers and virtual currencies above Rs 10,000 in a year. A threshold limit of Rs 50,000 has been kept for TDS for a specified person every year. Their accounts will be audited under the Income Tax Act. The provision of TDS will be effective from 1st July 2022 while tax on profits will be from 1st April.
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New column in ITR form
According to Bajaj, in the next financial year, a new column will be given in the ITR form in which taxpayers will have to show income from cryptocurrencies and other virtual digital assets.
Tax liability even if received in gift
According to Bajaj, even if crypto or other virtual digital assets are received as a gift, tax will still have to be paid. In addition to tax at the rate of 30 per cent on this, a surcharge of 15 per cent will also have to be paid in case of crypto income above 50 lakhs.
,Article: Rajeev Kumar)
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