Union Budget 2022: cryptocurrency The word property, market has gained immense popularity in India over the years. With over 100 million cryptocurrency investors, India is now home to the largest number of cryptocurrency owners globally, according to a study published by WazirX and Nasscom. The report states that investment in cryptocurrencies by Indians could reach $241 million by 2030. Considering the sheer size of cryptocurrency market And the risks associated with digital tokens, there should be a proper framework to regulate assets in India. While the much-awaited Cryptocurrency Bill will not be introduced during the ongoing budget session of Parliament, investors are expecting the Finance Ministry to introduce a proper cryptocurrency tax policy framework during this time. Union Budget 2022,
Naveen Wadhwa, DGM, Taxman said that if the government does not stop Indians from doing business in cryptocurrencies, we expect the government to introduce a regressive tax regime for cryptocurrencies.
How cryptocurrency will be taxed: Budget 2022 to provide a look
Currently, there is a specific provision under the Income Tax Act to tax income from cryptocurrency. As per the general provision, income from crypto assets is taxed as capital gains. However, some experts want both selling and buying of cryptocurrencies above the threshold limit.
brought under the purview of TDS/TCS provisions. This will help the government to gain investor footprint in the unregulated digital token market.
Some experts are of the opinion that a higher tax rate of 30 per cent pf should be levied on income from sale of cryptocurrencies, similar to winnings from lotteries, game shows, puzzles etc.
“While the government awaits on the cryptocurrency bill, much needed clarity is expected on its taxation in the upcoming Union Budget 2022. There are various concerns regarding taxation of crypto, its classification, applicable tax rates, TDS/TCS and GST implications. On the sale and purchase of cryptocurrencies etc., which we expect will be clarified during the budget session,” said Archit Gupta, Founder and CEO, Clear.
Deloitte India reported that the absence of specific provisions for taxability of cryptocurrencies in India is triggering uncertainties among investors – whether crypto transactions should be disclosed and offered tax. Cryptocurrency investors need clarity on how fair market value, cost, taxable income and reporting requirements should be calculated.
“It is recommended that a special regime for the taxation of cryptocurrencies be covered, inter alia, provisions relating to the classification of cryptocurrencies (capital assets versus financial instruments versus commodities), situations in which cryptocurrencies are taxable in India. , head of income for taxation, expenses that can be claimed, income tax rate, and reporting requirements,” Deloitte India said in its pre-budget expectations.
Some experts believed that both the sale and purchase of cryptocurrencies should be brought under the purview of reporting in the details of financial transactions. Trading companies already do similar reporting of the sale and purchase of shares and units of mutual funds.
“We expect that the Union Budget will offer a fair amount of clarity on the crypto landscape. While legal implementation is still some time away, any initiative announced in the budget will at least focus on crypto classification as an asset class, its taxation policies and how it is implemented in this world. The level will open a direct line of dialogue on the blue-ocean opportunities available in the emerging sector. This will not only encourage institutional investment in the space, but will also open up job opportunities in under-served markets,” said Nischal of cryptocurrency exchange WazirX. Shetty said.
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