Finance Minister – Nirmala Sitharaman announced the Union Budget 2022-23 on 1st February’22. Amongst various others, laws on Cryptocurrency was one of the most speculated one. It came as a shock and surprise to the crypto community when taxation at a flat rate of 30% and provision of tax deduction at 1% on every payments made on transfer of digital/virtual assets was announced in this year’s Budget.
Taxing Income from Cryptocurrency – Does this mean that the cryptocurrency is now legal ? Well, to answer your queries, let us look deep into it. According to the Income Tax Act, “an income earned from both – legal or illegal activities – can be taxed.” However, from a broader context, the announcement of specific tax provisions for cryptocurrencies is a positive step towards legalisation. The government has still not made cryptocurrencies legal under the Finance Bill, but it made the profits gained from it as taxable.
The profits made from the crypto-transactions would become taxable as per the standard income tax classifying it as Capital Gains or Business Incomes. This classification will depend on individual investors’ decision to benefit from long term appreciation with lesser trades or make frequent trades with higher volumes.
The ones who have missed hearing this year’s Budget, here is the link for you!
Well written with a lot of information on taxation of crypto currency.
Thank you. Stay tuned for regular news updates !
Aptly described… A Very well articulated Post.
Thank you. Stay tuned for regular news updates !