Income Tax-Crypto
I-T return form to have designated column for crypto gains
New Delhi/IBNS: Income tax return forms will have a different column to mention earnings from cryptocurrency and paying requisite taxes, said Revenue Secretary Tarun Bajaj on Wednesday.
April 1 onwards, the Centre will charge a 30 percent tax, cess, and surcharges on crypto proceeds as such gains will be treated similar to those made from speculative transactions like horse races.
Cryptocurrency gains have always been taxable and this year's specified announcement in the budget speech was meant to clear all doubts, Bajaj told PTI.
"The provision in the Finance Bill is related to taxation of virtual digital assets. It is to bring certainty to the 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,” he said.
The government has been working on a law to regulate cryptocurrencies but so far no draft has been made available to the public.
Meanwhile, to bring in cheaper and more efficient currency management, the RBI will introduce its own digital currency in the upcoming financial year.
The 30 percent taxation, cess, and the 15 percent surcharge are applicable on a reported income of 50 lakh plus earned from digital assets transactions or cryptocurrencies, he added.
"The Government was very clear that it has to push for a tax on income from crypto assets. So we have brought in a maximum rate and levied 30 percent, with an applicable surcharge. We have also brought in TDS, so we will now track the transactions,” Bajaj said.
In her budget 2022-23 speech on Feb 1, Finance Minister Nirmala Sitharaman proposed a one percent TDS on payment directed to digital currencies above Rs 10,000 and taxation of such gifts.
The TDS limit per annum would be Rs 50,000 for a particular group of people, including individuals/HUFs who are required to audit their accounts as per the I-T Act.
The implied TDS will be in effect from July 1 but gains are open for taxation from April 1.
In yet another virtual currency regulation, the Centre announced that no deduction is allowed for cryptocurrencies and virtual digital assets, as they do not have any economic value, except the underlying technology, the Revenue Secretary said.
In India, the cryptocurrency market grew by 641 percent through June 2021, reported PTI.
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