Indian government has revealed in Budget 2022 that it will start charging 30% tax plus cess and surcharges on income generated from cryptocurrency. Revenue Secretary Tarun Bajaj has said that ITR Filing form will have a separate column for disclosing profits made from transaction of crypto.
The government will be charging the tax on gains from crypto in same way as it charges income gained during horse races.
Tarun Bajaj gave an interview to Press Trust of India and told that gains made from crypto were always taxable. Budget gave the clarity over the issue and no one should be surprised. He said, “The provision in the Finance Bill is related to taxation of virtual digital assets. It is to bring certainty in taxation of cryptocurrencies. It does not convey anything on its legality which would come out once the Bill (on regulating such assets) is introduced in Parliament.”
There are chances that government will regulate cryptocurrencies that are being traded by Indians. However, no draft has been proposed in the cabinet but it might soon be discussed.
Also read:
ITR Filing: How Much You Need To Pay For Updating ITR
It is to be noted that 30% plus cess and surcharge of 15% will be charged on income above 50 lakhs. There was confusion in the people with respect to this. Bajaj pointed out that everyone will have to disclose the gains made from cryptocurrencies.
Bajaj said, “The Government was very clear that it has to push for a tax on income from crypto assets. So we have brought in maximum rate and levied 30 per cent, with an applicable surcharge. We have also brought in TDS, so we will now track the transactions.”
The Budget has also revealed that you will be charged a TDS of 1 percent if you will make transaction of equal or more than Rs 10000 in a year. All the individuals and HUF (Hindu Undivided Family) will also have to get their accounts audited under IT Act. The threshold limit for the TDS will be Rs 50,000 a year for individual and HUF.
Bajaj also elaborated that there will be no deduction in respect of expenditure or allowance when you generate income from crypto transactions. This is because crypto has no economic value and it’s just a technology. Due to which a separate column is being introduced in ITR Filing form.
He also said, “If somebody says it’s a long-term capital gains tax (LTCG), he may say no it’s not LTCG tax, it is a business income and hence liable to 30 per cent tax.” He said that some people are showing gains from crypto and are paying taxes but some are hiding it. The provision of TDS will make sure that information of transaction reaches to Income Tax Department directly.
