1% TDS On Cryptocurrency Tading From 1st July 2022, Know Details Here
TDS On Cryptocurrency: Cryptocurrency investors are going to get a...
TDS On Cryptocurrency: Cryptocurrency investors are going to get a big setback from July 1, 2022. From July 1, 2022, 1 percent TDS will have to be paid on all crypto transactions whether sold for profit or loss. Since then the enthusiasm for investing in cryptocurrencies has waned. This may further decrease after the TDS is levied.
Cryptocurrencies are not recognized but taxed
The government has not recognized cryptocurrencies but has decided to levy 30 per cent capital gains tax on cryptocurrencies income from 2022-23 this year. Also, from July 1, 1 percent TDS will also have to be paid on crypto transactions. Let us tell you that investors who do not sell cryptocurrencies for profit will also have to pay tax. Investors investing in such cryptos will have to pay one per cent TDS so that the government can trace the exact whereabouts of those transacting in cryptocurrencies.
Selling crypto at a profit will attract a tax of 30 percent. But even if not sold at profit, TDS of one percent will have to be paid, so that it will be known where crypto transactions have taken place. The provision of levying one percent TDS on cryptocurrencies is going to be implemented from July 1, 2022.
There is no provision for adjusting the loss in crypto
Cryptocurrency investors are not allowed to offset gains from one cryptocurrency for losses in another cryptocurrency. Let us explain you through an example, suppose an investor has invested in both bitcoin and ethereum cryptocurrencies. And if he makes a profit of Rs 1 lakh by investing in bitcoin and a loss of Rs 1 lakh by investing in ethereum, the investor will still have to pay tax at the rate of 30 percent on Rs 1 lakh.
Actually, there is a provision to adjust the profit loss arising from investment in property, shares. But cryptocurrencies have been kept out of this provision. The government has clearly stated that as per the provisions of the proposed section 115BBH of Income Tax 1961, loss arising from transfer of VDA (Virtual Digital Assets) shall not be allowed to be set-off against income arising from transfer of another VDA . Section 115BBH is a newly proposed clause in the Income Tax Act that defines gains from virtual digital assets such as cryptocurrencies.
GST on Crypto?
The meeting of the GST Council is scheduled to be held on June 17. In which there is a possibility of discussion regarding the imposition of GST (Goods and Services Tax) on cryptocurrencies and in that meeting a decision can be taken on keeping cryptocurrencies in the 28 percent slab. Currently, crypto exchanges have to pay 18 percent GST for providing their services.
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