Budget 2022: This is a plan to tax earnings from cryptocurrencies, thus understanding government preparation

Business Desk, Amar Ujala, New Delhi

Published by: Deepak Chaturvedi
Updated Saturday, 15 January 2022 10:36 AM IST

Summary

Union Budget 2022: The year 2021 saw a lot of investment in cryptocurrencies and the number of crypto investors in India has also increased significantly. The government had to prepare the bill after discussing crypto in depth. However, it cannot be introduced in the winter sessions of Parliament. Now people are expecting a big announcement regarding the digital currency in Budget 2022.

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There is a lot of investment in cryptocurrencies in the year 2021 and the number of crypto investors in India has also increased significantly. The government had to prepare the bill after discussing crypto in depth. However, it cannot be introduced in the winter sessions of Parliament. Now people are expecting a big announcement regarding the digital currency in Budget 2022. Meanwhile, experts believe that during the budget period, the government is likely to impose heavy taxes on revenue from crypto.

The budget will be introduced on February 1
In addition to ordinary taxpayers, businessmen and traders in the country, Indian crypto investors are also eagerly awaiting Budget 2022. Union Finance Minister Nirmala Sitharaman will present the budget in Parliament on February 1. Under such circumstances it is possible to make some announcements in this budget regarding cryptocurrencies as well. According to reports, the central government is currently seeking the advice of various tax experts on cryptocurrencies. In fact, the government now wants to clearly define tax on income earned by investing in cryptocurrencies or trading. Discusses whether income from cryptocurrencies can be considered as business income or capital gain.

Cryptocurrency can be a burden on investors
Significantly, the proposed cryptocurrency bill includes provisions such as treating cryptocurrencies as one commodity and treating virtual currencies differently depending on their use. The bill was supposed to be introduced in the winter session of Parliament but was postponed due to various issues related to tax and industry. Now a report says that the tax burden on cryptocurrency investors will increase significantly, according to a statement to be made in the budget. The central government has said it will keep the income tax slab on crypto assets between 35 per cent and 42 per cent. In addition, the government is considering levying 18 per cent GST on crypto trending.

Preparations to impose GST on crypto exchanges
Numerous reports have fueled speculation that transactions involving digital currency or cryptocurrencies will be taxed within the highest income tax bracket. As the debate over the crypto bill intensified, several reports were released even when the government stated that it planned to impose a one per cent GST on cryptocurrency exchanges, which would be collected at source. In addition, there is talk of handing over control of the cryptocurrency industry to market regulator Sebi. That is, SEBI monitors crypto investors at all times and every transaction of cryptocurrency is on the radar of the income tax department. However, the government’s full plan will be known at the time of budget submission.

Tax experts have given this crucial advice
According to a report, Indian investment in cryptocurrencies is expected to reach $ 241 million by 2030. According to Nasscom and WazirX, India currently has over 100 million crypto investors worldwide. Tax experts are of the view that transactions of cryptocurrencies exceeding the prescribed limit should be brought under the purview of TDS / TCS regulations. In doing so the government keeps a watchful eye on investors. In addition, he advised not to allow losses incurred due to sale of cryptocurrencies to be adjusted against other income.

Range

There is a lot of investment in cryptocurrencies in the year 2021 and the number of crypto investors in India has also increased significantly. The government had to prepare the bill after discussing crypto in depth. However, it cannot be introduced in the winter sessions of Parliament. Now people are expecting a big announcement regarding the digital currency in Budget 2022. Meanwhile, experts believe that during the budget period, the government is likely to impose heavy taxes on revenue from crypto.

The budget will be introduced on February 1

In addition to ordinary taxpayers, businessmen and traders in the country, Indian crypto investors are also eagerly awaiting Budget 2022. Union Finance Minister Nirmala Sitharaman will present the budget in Parliament on February 1. Under such circumstances it is possible to make some announcements in this budget regarding cryptocurrencies as well. According to reports, the central government is currently seeking the advice of various tax experts on cryptocurrencies. In fact, the government now wants to clearly define the tax on income earned by investing in cryptocurrencies or trading. Discusses whether income from cryptocurrencies can be considered as business income or capital gain.

Cryptocurrency can be a burden on investors

Significantly, the proposed cryptocurrency bill includes provisions such as treating cryptocurrencies as one commodity and treating virtual currencies differently depending on their use. The bill was supposed to be introduced in the winter session of Parliament but was postponed due to various issues related to tax and industry. Now a report says that the tax burden on cryptocurrency investors will increase significantly, according to a statement to be made in the budget. The central government has said it will keep the income tax slab on crypto assets between 35 per cent and 42 per cent. In addition, the government is considering levying 18 per cent GST on crypto trending.

Preparations to impose GST on crypto exchanges

Numerous reports have fueled speculation that transactions involving digital currency or cryptocurrencies will be taxed within the highest income tax bracket. As the crypto bill debate intensified, several reports were released stating that the government was planning to impose a one per cent GST on cryptocurrency exchanges, which would be collected at source. In addition, there is talk of handing over control of the cryptocurrency industry to market regulator Sebi. That is, SEBI monitors crypto investors at all times and every transaction of cryptocurrency is on the radar of the income tax department. However, the government’s full plan will be known at the time of budget submission.

Tax experts have given this crucial advice

According to a report, Indian investment in cryptocurrencies is expected to reach $ 241 million by 2030. According to Nasscom and WazirX, India currently has over 100 million crypto investors worldwide. Tax experts are of the view that transactions of cryptocurrencies exceeding the prescribed limit should be brought under the purview of TDS / TCS regulations. In doing so the government keeps a watchful eye on investors. In addition, he advised not to allow losses incurred due to sale of cryptocurrencies to be adjusted against other income.

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