A lot of people across the world have been investing a heavy amount in cryptocurrencies, also called “crypto” or “tokens”. In the past couple of years, the number of people investing in cryptocurrencies has grown significantly in India.
While presenting the Union Budget 2022-23, Finance Minister Nirmala Sitharaman announced an important update for all those who invest in cryptocurrencies. The FM announced that from this year, 30 percent of tax will be levied on cryptocurrency gains and incomes.
It must be noted that as of now, there is no specific guidance/specific tax provisions on taxation of cryptocurrencies in the Income Tax Act 1961. Those who invest in cryptos must make sure that they are reporting their profits in their taxes, as failure to do so can have consequences.
One always has the option to report their gains under in their income tax returns under the categories business income or capital gains. The classification of the same will depend on the investors’ intention and nature of these transactions.
According to the presentation of the Union Budget 2022, here is all you need to know about the taxation on cryptocurrency gains-
Those who invest their money in cryptocurrencies must know how to report their gains when they file their income tax return.