India acts tough on Cryptocurrency Income tax

MYSORE, India - March 26, 2022 - PRLog -- Indian parliament passed Finance bill 2022 incorporating various amendments to the existing tax laws as well introducing new tax laws for the financial year 2022-23 which will begin on April1st , 2022. The proposals to amend laws and new laws were presented to the parliament on 1st, February 2022 by The Finance Minister Ms Nirmala Sitharaman.

In the budget speech on 01.02.2022, Indian Finance Minister Ms Nirmala Sitharaman announced that India is going to TAX INCOME FROM THE CRYPTOCURRENCIES AT A FLAT RATE OF 30%. No deduction is allowed except the cost of acquisition. Further, TDS of 1% will be collected on the amount of transaction in virtual currencies. Receiver of gifts of virtual currency will be taxed.

The Finance bill 2022 was passed by the Indian parliament yesterday and new section 115bbh has been introduced in the Income tax act incorporating taxes on cryptocurrency. The new inclusion clause is tougher than thought of before as it will not allow any deduction in respect of any expenditure (other than cost of acquisition) nor allow set off of any loss from transfer of the virtual digital asset against income computed under any other provision of this Act to the assessee. Further such loss shall not be allowed to be carried forward to succeeding assessment years also. Now it is clarified that the loss made in a trade in one cryptocurrency cannot be set off against the profit made in other cryptocurrency trade, in a written clarification issued by Union Minister of State for Finance in the Loksabha.

The legality of cryptocurrency trade is not yet spelt out by the government and the government has brought tough tax laws making its trade less attractive to traders and investors.

In spite of such adverse investment climate for cryptocurrency business in India, it is guessed that more than 20 million Indians have invested in such risky accounts. We have to see what will happen to the Indian market in coming months with the introduction of the new law.

PLAN N PROGRESS
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