Crypto Investor In India? Checkout The New Crypto Tax Rules By Govt Of India

Although cryptocurrency is not completely legal, it isn't illegal either. For the first time ever, starting this April 1st, 2022, users who invest in cryptocurrencies such as Bitcoin, Ethereum, Dogecoin, and more have to obey the latest tax rules by Govt of India. Here are the complete details on the latest taxations on cryptocurrency by the central government of India.

The crypto-tax was originally announced during the union budget 2022-23, and these new laws are finally coming into play, starting from day one of the new financial year, ie, April 1st. These new tax rules come under the taxation of virtual digital assets (VDAs) and are also called crypto tax.

While the new crypto tax does not specify if the trading of cryptocurrencies in India is legal/illegal. However, it for sure says that the losses attained from the crypto asset cannot be set off against the gains from the crypto asset. In simple words, if you lose your money in crypto, it's your loss, and if you make a profit, you have to pay a certain percentage to the government of India.

30 Percent Income Tax On Crypto Gains

Starting from April 1st, users have to pay a whopping 30 percent income tax on all the profits made using cryptocurrency. This tax percentage is as high as gambling, which might discourage some users from investing in cryptocurrency.

Every time one invests in a cryptocurrency valued at Rs. 10,000 or more, there is also a TDS of 1 percent, and this rule will be applicable starting July 1st, 2022. This is also applicable to cryptocurrency-related gifts. This specific move is said to have an impact on intra-day cryptocurrency traders and is said to affect the number of cryptocurrency transactions.

According to Minister of State for Finance Pankaj Chaudhary, users cannot deduct the amount that has gone into infrastructure costing, such as setting up mining RIGs with GPUs, which is also a huge blow for cryptocurrency miners.

Although the Indian Govt is not banning or stopping Indian citizens from investing in cryptocurrencies, these high-taxation slabs are likely to discourage users from investing in cryptocurrency, especially those, who are currently planning to get into the world of cryptocurrency.

Via