Before investing, know about the tax on cryptocurrency in India

Budget 2022 tax announcements for cryptocurrency in India states -

1. Income (Any gains or losses made from a crypto asset held less than 12 months / Financial year) from any transfer of crypto, even gifts, would attract a 30% tax
2. Investors will also have to face additional 1% TDS (Tax Deducted at Source) on digital asset transfers above a certain threshold, which will allow it to capture transaction data with the government.
3. In addition, investors cannot get any deductions and won’t be allowed to set off losses from transfer of such assets against any other income.
4. As a disclosure requirements the taxpayers will have to report income from crypto through a separate column while filing I-T returns.
5. RBI-backed ‘digital rupee’ to be launched in FY23.

Conclusion: The higher tax rate also hints at tougher crypto regulations & government wants people to be aware of the higher volatility & risk into crypto market before investing into crypto.

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