Finance Minister Nirmala Sitharaman said the government has sovereign right to tax profit made from cryptocurrency transactions, and the decision on banning or not banning will be taken base on feedback from consultations.
Finance Minister Said :
“I am not going to legalise it or ban it at this stage. Banning or not banning will come subsequently, when consultations give me input”.
About the profit emanating from transactions in cryptocurrencies, Finance Minister Said :
“(Whether it is) legitimate or illegitimate, it is a different question, but I will tax because it is a sovereign right to tax”.
Finance Minister was responding to the questions raise by Congress member Chhaya Verma on cryptocurrency.
Chhaya Verma had ask about the legitimacy of taxing cryptocurrency.
In her Budget speech on 1st February 2022, Finance Minister had said that only RBI-issue Digital Rupee will be recognise as currency, and the government will levy a 30% tax on gains made from any other private digital assets from 1st April 2022.
The Budget 2022-23 has propose a 1% TDS on payments towards virtual currencies beyond Rs. 10,000 in a year and taxation of such gifts in the hands of the recipient.
The threshold limit for TDS would be Rs. 50,000 a year for specified persons, which include individuals/HUFs who are require to get their accounts audit under the I-T Act.
Also, no deduction in respect of any expenditure or allowance shall be allow while computing income from transactions in such assets.
It has also specified that losses from the transfer of virtual digital assets will not be allow to be set off against any other income.
The provisions relate to 1% TDS will come into effect from 1st July, 2022, while the gains will be taxed effective from 1st April 2022.
Disclaimer :
Cryptocurrency is an unregulated digital currency, not a legal tender and subject to market risks. The information provided in the article is not intended to be and does not constitute financial advice, trading advice or any other advice or recommendation of any sort offered or endorsed by 2YODOINDIA. 2YODOINDIA shall not be responsible for any loss arising from any investment based on any perceived recommendation, forecast or any other information contained in the article.
