Tatsat Chronicle Magazine

Crypto Industry to Seek Revision of 30% Levy on Transactions

The Budget has also mandated an additional 1 percent TDS on crypto transactions that exceed a certain limit to establish a record trail
February 9, 2022
crypto tax
Pictures used for Representation purpose only. Photo Credit- Flickr

In response to the recent 30 percent tax proposed in Union Budget 2022-23 on the sale or purchase of virtual digital assets like cryptocurrencies, the Indian crypto industry plans to seek a revision of the rate from the government, say reports.

Drafting a memorandum to that effect, the proposal, which will be headed by the Blockchain and Crypto Assets Council (BACC), will take into consideration the various implications of the new tax rules and their impact on the domestic crypto ecosystem and the economy at large.

The union budget had also mandated an additional 1 percent tax deducted at source (TDS) to be levied on crypto transactions exceeding a certain limit to establish a record trail. While such a virtual digital gift would be made taxable at the hands of the recipient, any losses incurred would not be eligible for a write-off against any other source of income. Except for deductions involving the cost of acquisitions, nothing else would be allowed.

Also Read- 10 Key Highlights of Union Budget 2022-23

Finance Secretary TV Somanathan had recently mentioned how cryptos are “legal, taxable, though unregulated” in India at present. He mentioned that taxing these virtual digital assets should not be equated with a stamp of government approval on crypto as a “solid asset class”.

Cryptocurrencies are now taxed on par with gains from speculative activities such as gambling and lotteries, putting the digital assets in the highest tax band.

In the past one year, the number of crypto investors in India has increased to over 15 million. Start-ups in this ecosystem have also attracted huge investments and two unicorns, or start-ups with a valuation of at least $1 billion, have emerged in the country – CoinDCX and CoinSwitch.

Jyoti Verma

The writer is a media professional based in Delhi. She has been writing on diverse subjects, including sustainable businesses, environment and climate change, health and education and others.