From April 1, 2022, 30 percent tax will be deducted on the income earned from digital assets. 1 percent TDS will be deducted on every transaction of its digital asset.
Tax on cryptocurrency: From April 1, 2022, there are going to be many changes in the income tax rules. The new income tax rules applicable to cryptocurrencies and other digital assets are included in these changes.
In the budget of 2022, the central government had said that income from cryptocurrencies or any digital asset will attract a flat 30 percent income tax. Apart from this, the recipient of a gift in the form of a digital asset will also have to pay 1 percent TDS and in some cases gift tax.
Talking on whether tax rules on digital asset transactions,
Balwant Jain, a Mumbai-based tax and investment expert, says, “From April 1, investors will have to pay 30 percent tax on income from digital assets. Apart from this, 1 percent of the purchase price will have to be paid as TDS on every transaction of digital asset. However, this TDS rule will be applicable from July 1.
Apart from this, the definition of property will also change from April 1, so that digital assets can be included in it. If digital assets of more than Rs 50,000 are received by way of gift from any non-specified relative within a financial year, then it will be treated as income.
Balwant Jain said that from the next financial year, taxpayers will have to mention the digital assets they have received from non-specified relatives during tax filing.
Another tax expert, Sujit Bangar of Taxbuddy.com, says that without any tax exemption, it will be extremely difficult to earn net profit from cryptocurrencies. He said that these rules will affect the earnings from cryptocurrency related transactions after paying taxes.
Regarding how TDS
will be deducted, Sujit Bangar says, “It is proposed to charge 1 percent TDS on transactions related to cryptocurrency. But the point to be noted here is whether we sell cryptocurrencies on profit or it is fixed to deduct 1 percent TDS on losses.
However, TDS deducted on losses can be claimed by setting off at the time of filing income tax at the end of the year. Sujit Bangar says that if you are planning to start trading in cryptocurrencies, then definitely file income tax return.
