‘Crypto Tax’: How You Can Save 10% Tax On Long Term Capital Gains Till March 31

What are experts saying

Most experts agree on one point of view, which is that it lacks clarity. As per one approach, gains received before March 31, 2022 can be classified as long-term capital gains and taxed at the rate of 20% after deducting costs. According to another view, tax should be paid at the rate of 30% as there are no special provisions in the law in this regard, and tax can be paid as per the newly proposed law.

According to an expert, you will have to deduct tax on capital gains, which will attract a flat 30% tax, if the bookings are made from April 1 to March 31, 2022.

“The applicability of 30% tax will start from April 1 and booking earlier will reduce the tax burden significantly, with the tax rate reduced to 10% by March 31, as 20% is still at large. Capital gains from crypto gains is not a new term but the government is giving a definite relief to the current booking of long term crypto gains if any will happen before 31st March 2022. However, we are still far from a reasonable explanation. Final taxation and how it will be done and it can create much bigger confusion than before,” said Amit Gupta, MD, SAG Infotech

Another expert said the 30% tax proposed in Budget 2022 on these benefits needs to be paid in the current fiscal as well to avoid any litigation.

“To avoid litigation in future, we believe that tax should be paid at the rate of 30 per cent. “The government is also expected to provide necessary clarifications in this regard,” said Pramod Chandrayaan, co-founder and CTO, Finmap.

“HODling is the best strategy to generate considerable wealth in the crypto market, which is highly volatile and not suited for the short term outlook for retail investors. Now that the government has decided to tax crypto gains @ 30%, It will be interesting to know how crypto gains will be taxed in the current financial year as there is no blueprint for the same,” he said.

As per an expert view, to keep things simple any capital gain on crypto held for more than 36 months and then sold may be taxed @ 10-15%, as these provisions already exist in other are for the asset class, but if the gains are made from short term holdings, it can be taxed @ 20-25% which may resonate well with the crypto investor. Lower tax for long term holding will be a welcome move as it will inculcate a healthy investment discipline amongst crypto investors and help them to generate considerable corpus which can indirectly be a good contributor to the economic development of our country. Is. The more people make money from long-term investments, the more they will give back to the nation through taxes.

Finance Minister Nirmala Sitharaman, presenting the budget for 2022-23, said that the transfer of digital assets, including crypto and non-fungible tokens (NFTs), will be subject to a 30% tax. Further, all transfers of such properties will be subject to 1% of Tax Deduction at Source (TDS). Gifting of such property will also attract 30% tax.