Earlier, Revenue Secretary Tarun Bajaj said that income tax return forms from next year will have a separate column for making disclosures on gains made from cryptocurrencies and paying taxes.Crypto investors involved in the transaction must take note that there is a taxability of the crypto-currency for the ongoing financial year ending on March 31. So any transaction involving crypto assets before April 2022 will attract income tax.
“The taxability of the crypto-currency is certain for this financial year too. Crypto investors should know that the transactions done before April 2022 will not be tax-free,” Central Board of Direct Taxes (CBDT) Chairman JB Mohapatra said.
Earlier, Revenue Secretary Tarun Bajaj said that income tax return forms from next year will have a separate column for making disclosures on gains made from cryptocurrencies and paying taxes.
In Budget 2022, the government announced a specific tax regime for virtual digital assets. The government said that any income from the transfer of any virtual digital asset will be taxed at the rate of 30 per cent. The gift of a virtual digital asset will also be taxed in the hands of the recipient.
Loss from the transfer of virtual digital asset cannot be set off against any other income, it said.
To capture the transaction details, Tax Deducted at Source (TDS) will be provided on payment made in relation to the transfer of a virtual digital asset at the rate of 1 per cent of such consideration above a monetary threshold, according to announcements in Budget 2022.
The head of the I-T department establishment in the country said that this is “the right time” for the taxman to enter this arena, about which, Finance Minister Nirmala Sitharaman has said that the government was undertaking a stakeholders’ consultation to frame a national policy and regulator in the coming days.
“The department does not sit in judgement over the legality of any transaction. The income-tax department and the income-tax Act only look at whether the transactions that you have entered into are resulting in income. We are not into the legality of any income but we are into the taxing of that income,” JB Mohapatra said.
“That is the reason, I would say, that taxing crypto-currency under the new legislation does not attach any legality…it does not…,” Mohapatra told PTI in a post-Budget interview.