Budget 2022 Cryptocurrency Tax News: Clarity from FM! 30% tax on income gifts, 1% TDS on buy/sale – Check virtual assets taxations details

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The tax proposals will come into effect from April 1 after the passage of the Union Budget in Parliament.

Budget 2022 Cryptocurrency: Giving clarity on taxation of cryptocurrencies and other virtual assets, Finance Minister Nirmala Sitharaman on Tuesday proposed a 30 per cent tax on income from transactions in such assets.

Read More:Budget 2022 ITR Correction: Big relief for Income Tax payers seeking to correct omissions in I-T return filing

Also, to bring such assets under the tax net, she proposed a 1 per cent TDS (tax deducted at source) on transactions in such asset classes above a certain threshold.

The tax proposals will come into effect from April 1 after the passage of the Union Budget in Parliament.

I propose to provide that any income from transfer of any virtual digital asset shall be taxed at the rate of 30%. No deduction in respect of any expenditure or allowance shall be allowed while computing such income, except cost of acquisition: FM Nirmala Sitharaman#Budget2022 pic.twitter.com/DHQvZsRyeN

— ANI (@ANI) February 1, 2022

Digital Rupee 

Meeting demands from large sections of industry, she said the RBI will launch a ‘Digital Rupee’ based on blockchain technology in 2022-23.

Experts said the 30 per cent tax levied on income arising from the sale of cryptocurrency is similar to the tax rate on winnings from lottery, game shows, puzzles etc, as per PTI.

Digital currency and assets like NFTs (non-fungible tokens) have gained traction globally over the last couple of years. Trading in these assets has increased manifold with cryptocurrency exchanges being launched. However, India did not have a clear policy on either regulating or taxing such asset classes.