The government is ready to resolving legitimate concerns and objections of cryptocurrency -trading participants raised by the new taxation system for virtual digital assets, but believes there is no economic justification for decreasing the planned 30 percent tax on earnings from cryptocurrency asset trading.
While a review of the 1% TDS (tax deducted at source) rate for all virtual asset trades could be considered. Finance Ministry officials also stated that even investments in equity and debt instruments on stock exchanges. It generate value for the economy are subject to a Securities Transaction Tax levy.
Finance Ministry decide to focus on Cryptocurrency in Budget 2022-23:
Any revenue from virtual digital assets is taxable at 30%, the Finance Minister stated during the federal budget presentation. With the exception of purchase costs, there will be no deduction. The TDS is applicable over a certain monetary level, and the gift of virtual currency is taxable in the recipient’s hands.”
Finance Minister Nirmala Sitharaman announced in her Union Budget 2022 speech that the country’s central bank, the Reserve Bank of India (RBI), will launch a digital currency in the following fiscal year utilizing blockchain and other supporting technology.
In response to industry concerns about the tax rates, Revenue Secretary Tarun Bajaj firmly endorsed the 30% rate. He also stated that there was no need to tax these assets at a lower rate than everyone else.
Revenue Secretary stated important conclusion on TDS rate:
Mr. Bajaj said that the ultra-rich pay 42 percent taxes, including surcharges. He also said, adding that the government didn’t need to promote such trade even though it may reconsider the 1% TDS rate.
We’re looking at little nitty-gritty, Mr. Bajaj said. Otherwise, someone may earn capital gains on equities and display losses here in your own wallet to wallet transactions. As a result, they now bear responsibility and accountability.
If there are any objections on which we agree, that the legislation has to be smoothed up. Then of course, we will sort it out, said J.B. Mohapatra, head of the Central Board of Direct Taxes. It is remaining unaffected by the alleged opacity of that section, he emphasized. You should not draw any conclusions about the regulatory regime from this tax.