As usual pre-budget speculations are going on and the hottest topic is cryptocurrency. This is not the first time rather from November onwards when the news came out related to banning cryptos, all of a sudden Indian crypto market crashed. The current speculations related to crypto are related to its expected tax treatment in the upcoming budget on 1st Feb 2022.
The speculations are related to deduction of TDS i.e., tax deducted at source on the crypto transactions above a threshold limit. It is confirmed that if the crypto transactions come under the ambit of TDS then they will surely cover under SFT i.e., specified financial transactions for the purpose of reporting to the Income Tax Department.
Some speculations are related to taxing crypto gains at the maximum rate of 30% i.e., treating crypto gains at par with the lottery or gambling income. If this would be done then it would be considered an aggressive step as gaining in cryptos is not as similar as winning in lotteries and gambling. Crypto gains are generated after proper studies of crypto and not just by putting money like in lottery or gambling but after all, these are speculations.
India has the highest number of crypto investors which is more than 100 million. Moreover, some investors have invested huge money in crypto mining farms. Baning crypto or taxing it at 30% could severely impact those heavy investors.
The crypto bill was expected to come out in the winter session however it delayed till yet. Everyone is expecting the crypto bill in this budget session, which may either excite the investors or depress them.
According to the Indtaxes’s experts, TDS on crypto transactions is a welcomed step however banning it or taxing it at par with lotteries could hurt the sentiments of investors.
