Cryptocurrency Taxation -India-Analysis 2022

 

Cryptocurrency Taxation 



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INCOME TAX APPLICABLE ON CRYPTOCURRENCY FROM 01/04/2022

From April 1, 2022, all Digital Assets investors will have to pay a flat  30  percent tax on one's income on digital assets. In addition, 1 percent T.D.S. will be deducted by the buyer of digital assets. 1 percent T.D.S. will have to be deducted from the purchase price of the transaction. However, this T.D.S. rule will come into force from July 1, 2022. Apart from this,  digital assets have been included by changing the definition of property from April 1,  2022. Any gift, including digital assets received from non-relatives, will be treated as income if the total value of all gifts exceeds ₹50,000 in the same financial year.

Profits on the sale of cryptocurrencies will be taxed at the rate of 30 percent tax. The only deduction from the sale idea could be the 'cost of acquiring cryptocurrency'. No other expenses will be allowed to be deducted. With no set of losses off from other sources of income,  it will be very challenging to make net profitable trading in cryptocurrency. This taxation will definitely affect the post-tax returns of cryptocurrency transactions.

What is cryptocurrency and how it works?

Cryptocurrency is a digital payment system that doesn't rely on banks to verify transactions. It’s a peer-to-peer system that can enable anyone anywhere to send and receive payments. Instead of being physical money carried around and exchanged in the real world, cryptocurrency payments exist purely as digital entries to an online database describing specific transactions. When you transfer cryptocurrency funds, the transactions are recorded in a public ledger. Cryptocurrency is stored in digital wallets.

Cryptocurrency received its name because it uses encryption to verify transactions. This means advanced coding is involved in storing and transmitting cryptocurrency data between wallets and to public ledgers. The aim of encryption is to provide security and safety.

The first cryptocurrency was Bitcoin, which was founded in 2009 and remains the best known today. Much of the interest in cryptocurrencies is to trade for profit, with speculators at times driving prices skyward.

Comments

  1. Arvind SinghJuly 6, 2022 at 9:19 AM

    Very good and useful information.

    ReplyDelete
  2. Madhav sunghJuly 6, 2022 at 12:21 PM

    Very helpful content

    ReplyDelete

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