The 30% crypto tax will not be applicable on every trade or sale. Only the trading or transaction in which the investor will benefit, will be taxed at 30 per cent. That is, if there is a profit on selling crypto, then 30 percent tax will have to be paid, there will be no tax on the loss.
Cryptocurrency tax rule
Crypto Tax from April 1 (crypto tax) rule has come into force. Now cryptocurrencies (CryptocurrencyIf you do a transaction, then keep some things in mind. These things are related to the new tax rule of crypto. The government has not mentioned crypto tax nor has it spoken of cryptocurrency anywhere. The government has mentioned Virtual Digital Asset or VDA. Cryptocurrencies or non-fungible tokens like bitcoin (NFT) come under this VDA. The new Finance Bill 2022 has come into effect from April 1, in which the rule of tax has been included. In the budget, the Finance Minister had said that trading of virtual assets will attract 30 percent tax. Along with this 1% GST will also have to be paid. Whenever there is a transaction of VDA or cryptocurrency, the user will have to pay 1% TDS.
There is deep concern among investors in the name of 30% tax as they will have to pay more tax. Whenever they get profit from the transaction, they will have to pay tax at the rate of 30 per cent. There was concern among investors about this, in view of which the Finance Minister has said that this is an initial step and later its detailed framework will be ready. If you also invest in crypto, do trading then keep these 5 things in mind.
1-30 percent crypto tax will not be levied on every trade or sale. Only the trading or transaction in which the investor will benefit, will be taxed at 30 per cent. That is, if there is a profit on selling crypto, then 30 percent tax will have to be paid, there will be no tax on the loss. The government has not given any details of the virtual asset, but it will definitely include cryptocurrencies and NFTs.
No tax will be levied on the expenditure incurred on the transaction of 2-VDA. However, tax will be deducted on the cost of purchasing the virtual digital asset. No tax will be levied on losses incurred by purchasing cryptocurrencies or NFTs. 30 percent tax will have to be paid only if there is profit.
3-Cannot set off losses from virtual assets or cryptocurrencies with other businesses. For example, the losses of cryptocurrencies cannot be covered by the earnings of shares, mutual funds etc. Losses from digital assets cannot be carried forward to the next financial year.
4- TDS of 1% will be levied on every transaction done with virtual digital asset. This means that if any digital token is bought or sold, there is a loss or profit, 1% TDS will have to be paid on it. If there is a loss in this, then you can file a tax return. The maximum amount of TDS in a year has been kept at Rs 50,000. TDS rule will start from 1st July 2022.
5- If any digital virtual asset is taken in the gift, crypto tax will also have to be paid on it. In this case, tax on cryptocurrencies and NFTs will have to be paid at the rate of 30%.
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