- All virtual digital assets (VDAs) and their revenues will be subject to tax.
- Those that make money by converting Bitcoin to NFTs will also be taxed.
The Finance Bill, 2022 was approved in the Lok Sabha, which means that the Budget 2022’s measures on crypto tax would begin to take effect. The planned 30 percent tax on crypto revenue would commence on April 1, 2022, while the 1 percent TDS on virtual currency payments would begin on July 1, 2022.
Before the law was enacted, the government recommended tightening the taxes on cryptocurrencies by disallowing the set-off of any losses against profits from other virtual digital assets.
All virtual digital assets (VDAs) and their revenues will continue to be subject to the tax levied by the Centre. Those that make money by converting Bitcoin to NFTs will be taxed. According to the budget, cryptocurrency and other virtual assets transactions would also be subject to a 1% tax deducted at source (TDS).
Many Investors Trying to Evade Tax
Crypto investors in India will be taxed at a rate of 30% on the profits they make from cryptocurrency transactions. As a result, many investors are reportedly moving their crypto assets to personal wallets outside of India to evade the new taxation regime.
In the fiscal year 2020/21 (the advisory year 2021/22), the deadline for submitting the Indian citizen’s Income Tax Return (ITR) is March 31. When COVID-19 necessitated an extension, the initial deadline of July 31 was pushed back to December 31, 2021, then February 15, 2021, and eventually March 15. An income tax legislation offers taxpayers a three-month window to submit a belated ITR, which is why the due date for ITRs is March 31. If residents fail to submit their Tax Returns (ITR) by the deadline, they may be subject to penalty and interest charges from the income tax department.
