Income tax calculator: How cryptocurrency traders might be taxed from April 1

Income tax calculator: From 1st April 2022, a number of earnings tax rule modifications introduced in Budget 2022 will get applied throughout nation. New earnings tax regulation on cryptocurrency and different digital belongings are one in all them. According to Union Budget 2022, achieve on digital belongings together with cryptocurrency like bitcoins might be taxed flat 30 per cent whereas there might be 1 per cent TDS and present tax underneath sure situations to be paid by the receiver of digital asset as present.

Speaking on cryptocurrency tax in India getting applied in new monetary 12 months; Mumbai-based tax and funding knowledgeable Balwant Jain stated, “From 1st April 2022, all digital asset investors will have to pay flat 30 per cent tax on one’s income on digital assets. Apart from this, there will be 1 per cent TDS to be deducted by the purchaser of digital assets. 1 per cent TDS will have to be deducted on the purchase value of the transaction. However, this TDS rule will become applicable from 1st July 2022. Apart from this, from 1st April 2022, definition of property has been changed to include digital assets. Any gift including digital asset received from non-specified relative will be considered as income if the aggregate value of all gifts become more than ₹50,000 in single financial year.”

Balwant Jain stated that from subsequent monetary 12 months, a taxpayer is suggested to incorporate present quantity of the digital belongings as nicely whereas calculating the web present quantity accepted by non-specified kinfolk.

Echoing with Balwant Jain’s views; Sujit Bangar, Founder at Taxbuddy.com stated, “The gain on sell of cryptocurrency would be taxed at 30 per cent tax rate. Only deduction from sell consideration can be ‘cost of acquisition of cryptocurrency’. There won’t be any other expenses allowed to be deducted. Due to no set off of loss from other sources of income, it will become very challenging to have a net profitable trade in cryptocurrency. This taxation would certainly impact post tax returns of cryptocurrency transactions.”

On how TDS might be levied on digital belongings like cryptocurrency, bitcoins, and many others., Sujit Bangar of Taxbuddy.com defined, “TDS at the rate of 1 per cent has been proposed for transaction involving cryptocurrency. Important point to note is that, we may sell cryptocurrency at profit or loss but TDS at the rate of 1 per cent would certainly happen. We can claim refund of TDS done on transaction involving loss. Therefore, it would be recommended to file income tax return if you have entered into transactions in cryptocurrency.”

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