India’s Finance Minister Nirmala Sitharaman presented the 2022 Budget on 1st Feb and the internet was taken by storm. One of the focal points of this attention was the FM finally making a statement on the fate of cryptocurrencies and blockchain technology in the country. Nirmala Sitharaman said on Tuesday that only RBI-issued ‘Digital Rupees’ will be recognized as currency and that the government will levy a 30% tax on gains made from any other private digital assets beginning April 1. Also, loss from the transfer of any such asset cannot be set off against any other income. Budget 2022-23 also proposed a 1% TDS on virtual currency payments exceeding Rs 10,000 per year, as well as taxation of such gifts in the hands of the recipient. The TDS threshold limit would be Rs 50,000 per year for specified persons, which would include individuals and HUFs required to have their accounts audited under the I-T Act. Furthermore, no deduction for any expenditure or allowance shall be allowed when calculating income from transactions in such assets. It’s most likely the first time an industry has applauded the imposition of a steep tax on the asset class in which it trades. TDS Has Been Proposed to Track the Money Trail in Cryptocurrencies She stated that there has been a phenomenal increase in transactions in virtual digital assets while introducing a scheme for the taxation of virtual digital assets in the Budget. Because of the magnitud...
