Starting April 1 this year, and despite the crypto sector’s efforts, cryptoasset gains in India will be taxed at 30% – the highest tax bracket, the nation’s Parliament confirmed today. In comparison to this tax, the tax rate on stock trading ranges from 0% to 15%.
From now on taxed the same as lottery winnings, all “virtual digital assets” – from bitcoin (BTC), over airdrops and crypto gifts, to NFTs – fall under this latest tax decision.
Per an earlier report by the Business Insider India, the country’s crypto investors and traders will have to keep an eye on several provisions that will affect their 2022-2023 financial year:
- all crypto profits gained over the course of the year will be taxed at a flat 30% rate;
- cryptoassets that haven’t been sold – hence the gains were not ‘realized’ – will not be taxed until a portion of it is sold, even if the asset’s price has increased since the time it was purchased;
- after accounting for all crypto transactions made over the year, if there is an overall loss with no profits made, the tax will not be paid;
- those who earn all/most of their income from crypto can declare their earnings as business income, but there will be no business expense deductions allowed;
- showing crypto profits as capital gains which is taxed at up to 20% plus surcharge will not be allowed;
- there is a 1% tax deduction at source (TDS) on all crypto transaction redemptions, which are to be deducted “presumably by the crypto exchange” the investor uses, said the report – therefore, the TDS is deducted upon the entire transaction value even if the investor makes a loss.
This last will “nibble away” at one’s capital, noted the report, citing industry players, such as Nithin Kamath of the Zerodha trading platform.
The crypto industry had actively fought against this latest bill ever since the taxes were proposed in February, but as the attempts of easing the provisions have failed, the case may yet go to the Supreme Court.
Source: Cryptonews
