Rajkotupdates.News : Government May Consider Levying Tds Tcs On Cryptocurrency Trading
Cryptocurrency: The government may consider imposing TDS/TCS on the sale and purchase of cryptocurrencies above a certain limit in the upcoming budget, and such transactions should be brought under the ambit of specific transactions to report to income tax authorities, according to Arvind Srivatsan, leader, and partner at Nangia Anderson LLP’s Tax Department.
In addition, a higher tax rate of 30% should be imposed on income from the sale of cryptocurrencies, comparable to profits from game shows, lotteries, puzzles, etc.
Rajkotupdates.News : Government May Consider Levying Tds Tcs On Cryptocurrency Trading
Srivats stated on 1 February, when discussing what the upcoming Union Budget 2022-23 may have in store for India’s crypto owners, that the country currently has the highest number of crypto owners in the world at 10.07 crore, and according to a report, it will have the highest number of Indians in cryptocurrencies by 2030. The expected level of investments is $241 million.
“It was anticipated that a measure to regulate cryptocurrencies would be introduced during the winter session of Congress. However, it was not introduced, and the government is now anticipated to consider the measure during the budget session. Unless the government bans Indians. We expect the government to implement a regressive tax system for cryptocurrencies if they are traded,” he noted.
Taking into account the scale of the market, the amount at stake, and the risk associated with cryptocurrencies, he stated that the taxation of cryptocurrencies might change, such as bringing them under the provisions of tax deducted at source (TDS) and tax collected at source (TDS). (TCS) exceeds a threshold enabling the government to obtain “investor footprints.”
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Both acquisitions and sales of cryptocurrencies must be reported on the Statement of Financial Transactions (SFT).
According to him, trading firms already disclose the same information for selling and purchasing shares and mutual fund units.
To maintain track of the taxpayer’s high-value transactions, the Income Tax Act defines SFT or Reportable Account.
This aids the tax authorities in collecting information on certain defined high-value transactions conducted by any individual throughout the year.
SFT reporting applies to financial institutions, enterprises, and stock market intermediaries. Srivatsan stated that income from the sale of cryptocurrencies, such as rewards from lotteries, game shows, and puzzles, should be taxed at a 30 percent rate.
The bill responds to concerns that such currencies are purportedly being used to deceive investors.
Separately, the government is considering changes to the Income Tax Act to bring cryptocurrencies under the tax net and potential budget amendments for 2022-23.
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