Introduction
Beginning April 1, all forms of virtual digital assets (VDA) or crypto assets that are sold at a profit will attract a tax of 30%. The announcement was made by Finance Minister Nirmala Sitharaman in her Union Budget speech.
Taxation on crypto
There is a direct tax provision on the income or profit made from crypto currencies. All crypto profits gained over the year will be taxed at 30 %. Gift of virtual digital asset is also proposed to be taxed in the hands of the recipient. Loss from transfer of virtual digital asset cannot be set off against any other income.
If you buy a crypto asset for Rs 2000 and sell it for Rs 4000, you will have to pay a 30 percent tax on the Rs 2000 profit, then the tax payable is Rs 600.
TDS on crypto
The amendment under the bill also directs 1% tax deducted at source (TDS) on Indians buying or selling crypto along with taxes on crypto gifts. Unlike, the 30% tax on capital gains in VDA, the TDS will come into effect starting July. TDS is deducted upon the entire transaction value even if you make a loss.
Taxable under the head of capital gain
Yes, because cryptocurrency is taxed as property much like stocks, you are required to pay a capital gains tax when selling, trading, or using as means to purchase of your cryptocurrencies like Bitcoin, Ether, or Dogecoin.
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