- The tax measure was approved by the government.
- The 1% tax deducted at source (TDS) will be implemented on July 1.
Beginning April 1 this year, cryptocurrency and virtual assets earnings In India will pay 30% tax, Central Board of Direct Taxes (CBDT) chairman JB Mohapatra said.
The CBDT chairman said the proposed 30 percent tax on cryptocurrency revenue was approved by the government and is set for implementation next month.
However, the implementation of the 1% tax deducted at source (TDS) is pushed back to July 1, Mohapatra said.
“Today’s income tax collection of Rs 13.63 lakh crore is expected to rise further till March 30. Our gross & net collections in the last five years and the history of the tax department are optimal. Our gross numbers have crossed Rs 15 lakh, which we could never touch earlier,” Mohapatra said.
The CBDT chief made the state as he explained that the government net tax collections rose 48.4% annually to Rs 13.63 lakh crore, the highest volume since 2018-19.
India is one of the few sovereigns to impose a tax on cryptocurrencies and digital assets, including non-fungible tokens (NFTs) after Finance Minister Nirmala Sitharman submitted a 30% income tax on cryptocurrency transactions in the 2022 Union Budget.
Sitharman had also proposed a 1% TDS on such transactions to include the asset class under a tax regime.
She said the Ministry would impose the tax measure on cryptocurrencies, including NFTs, which have become popular in India.
“No deduction in respect of any expenditure or allowance shall be allowed while computing such income except the acquisition cost,” Sitharaman said in late January. “Further, loss from the transfer of virtual digital assets cannot be set off against any other income.”
Crypto groups was 0.01% tax rate instead
However, several cryptocurrency groups have called on the Indian government to rethink its planned 1% TDS and asked Sitharman to reconsider her proposal.
The Blockchain and Crypto Assets Council (BACC) suggested lowering the TDS to 0.01%.
For its part, IndiaTech wrote a letter to finance minister Nirmala Sitharaman and revenue secretary Tarun Bajaj echoing BACC’s proposal.
“If the intent of the proposals was to seek additional revenues from such crypto assets, then the 1% tax on the entire transaction value will render the business unviable, thereby having an impact on government revenues forcing investors and those engaging in trade to operate overseas, or be forced to resort to operating through opaque P2P methods,” IndiaTech Chief Executive Rameesh Kailasam said in the letter.
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