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Union Budget 2022: Trading in cryptocurrencies may get trickier

In order to monitor all transactions happening in the crypto space, the government has also announced that all the crypto transactions will be taxed at 1 per cent as TDS.

Published: 03rd February 2022 07:56 AM  |   Last Updated: 03rd February 2022 07:56 AM   |  A+A-

Bitcoins, cryptocurrency

For representational purposes. (File Photo)

Express News Service

BENGALURU: Though the Budget announcement of 30 per cent tax on digital asset is a welcome move for the emerging crypto industry in India, some investors and crypto players say the steep tax rate might dissuade traders. They seek more clarity on the proposed tax regime on virtual assets.

In order to monitor all transactions happening in the crypto space, the government has also announced that all the crypto transactions will be taxed at 1 per cent as TDS. According to crypto players, this approach might prove to be slightly drastic for intra-day traders as they buy and sell on the same day and do numerous such transactions.

"The same traders will also be liable to pay 30 per cent taxes on profit as well. This will also affect the volume of transactions happening in the crypto space within India. For the days to come, it might be a bad move from the government's side to impose such high TDS, given some investors tend to do transactions for small profits," says Sathvik Vishwanath, co-founder and CEO of Unocoin.

For a few years now, digital asset transactions have increased significantly and there are over 20 million crypto investors in the country with crypto holdings of over Rs 40,000 crore. Vishwanath points out that if a person’s income is Rs 4.5 lakh P.A, and the profits (s)he made out of crypto is Rs 60,000, the total taxable income would be Rs 5.1 lakh and the tax liability would be as per income tax slabs.

There are multiple factors and very minute details accounting for these calculations that need to be considered, and it might be more difficult to file the taxes, especially for intra-day traders, he adds. "If intra-day traders are profitable generally, we do not believe that a 30 per cent tax will make them reconsider trading," Giottus Crypto Exchange CEO Vikram Subburaj says.



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