Finance Minister Nirmala Sitharaman made a big announcement about cryptocurrencies while presenting the country's general budget on Tuesday. Under this, income from cryptocurrencies will now have to pay a tax of 30 percent. Along with this, TDS will be deducted at the rate of 1% for the transfer of virtual digital assets. According to the government, even if cryptocurrency is given as a gift, the recipient of this precious gift will also have to pay 30 percent tax. After all, what is the government's formula, how the tax will have to be paid, and how much TDS will be deducted? Let us know what crypto expert Hanif Sheikh told us to explain it in simple words.
That much of the income from crypto will be deducted
The Finance Minister did not use the word cryptocurrency anywhere in his entire budget speech, but his announcement on virtual currency and the digital asset is being considered in this direction. The Finance Minister announced the imposition of a 30 percent tax on income from virtual currency or digital assets. Regarding this, Hanif Sheikh, CEO and crypto expert of Upsocial Network, says that suppose you invested 1 lakh rupees in cryptocurrency, after this investment you got a profit of 50 thousand rupees, then the government would pay this 50 thousand rupees as tax. 30 percent tax will be deducted on profits, that is, out of this earning you from crypto, Rs 15000 will go to the government's account.
Tax will be levied on the gift taker
Apart from this, the Finance Minister has also announced in his budget speech to impose a hefty 30 percent tax in the case of gifting of AC property. It can be understood in this way that if you give a cryptocurrency gift of Rs 1 lakh to someone, then to whom you are giving this precious gift i.e. 30 percent tax will apply to the recipient. If you gift a cryptocurrency worth Rs 1 lakh, then he will have to pay 30 percent of it or Rs 30,000 as tax to the government. Siddharth Jaiswal, the founder of SportChain, says that the decision to impose a 30 percent tax on crypto income is a bit surprising, but crypto investors in India are considering it as a positive step of the government. This move will eventually make investors think twice while deciding where to invest their money in this risky crypto market.
Calculation of 1% TDS
TDS i.e. Tax Deducted at Source is a part of Income Tax. Talking about the announcement of the government, you will have to pay TDS of 1 percent on the transaction of any kind of cryptocurrency. If you understand in simple language, if you have done a transaction of cryptocurrency of Rs 1 lakh, then 1 percent TDS will be deducted from the amount of this transaction when it comes to your account. By deducting TDS, the government will get a complete account of the cryptocurrency transactions done from your account. Meaning in a way, TDS is levied to keep an eye on the transactions of cryptocurrencies.
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