The crypto ecosystem has welcomed Finance Minister Nirmala Sitharaman’s proposal for a 30 per cent tax on digital assets. Finance Minister Nirmala Sitharaman on Tuesday said only RBI-issued ‘Digital Rupee’ will be recognised as currency and the government will levy 30 per cent tax on gains made from any other private digital assets from April 1.
“There will no big differences comprise, as if we talk about investment like gold and stock; the return in crypto investment is much better. Crypto gives direct exposure to demand for digital currency and is also potentially profitable. Now legalisation of crypto minimising risks. It’s like the cherry on the cake,” said Vipin Kumar, CEO Technoloader Pvt. Ltd.
The Budget 2022-23 also proposed a 1 per cent TDS on payments towards virtual currencies beyond ₹10,000 in a year and taxation of such gifts in the hands of the recipient. The threshold limit for TDS would be ₹50,000 a year for specified persons, which include individuals/HUFs who are required to get their accounts audited under the I-T Act.
Also, no deduction in respect of any expenditure or allowance shall be allowed while computing income from transactions in such assets. It has also specified that losses from the transfer of virtual digital assets will not be allowed to be set off against any other income.
The provisions related to 1 per cent TDS will come into effect from July 1, 2022, while the gains will be taxed effective April 1.
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