Hello Friends, How are you all ?? Wishing you all happy and prosperous life ahead.
As Income Tax return file deadline is near, so crypto investors are confused about how to pay ITR(income tax return), As crypto taxation is new to Indian crypto system, Investor gets complexity In paying the Tax related to virtual Digital Assets. so i would like to explain about Tax related to crypto currency.
As government of india recognised Crypto currency as Virtual digital asset, If you earn any profit from crypto in the financial year then you will have to pay 30% tax on it plus surcharge and cess. applies uniformly to all investors regardless of income nature or holding period. The tax imposed on the selling or can say cryto transaction, as there is no tax on holding the digital tokens. For example Suppose you invested Rs 1 lakh in crypto at the beginning of the year and your profit at the end of the year is Rs 1,50,000, then your tax on Rs 50000 will be 30% i.e 15,000 you have to pay the Tax. If a this case, if you suffer loss on crypto then you cannot set off it up with profit, or can't not subtract it from your profit. Suppose Suppose your 1 year crypto profit is Rs 10 lakh and your loss is Rs 2 lakh, then you cannot subtract it from your profit,So you can not take 8 lakhs as culmative profit, Your Taxes charge will be applied on your profit which is Rs 10 lakh and not Rs 8 lakh. Hopefully you easily understand the Tax system on crypto.
Recognizing the significance of crypto assets, the Finance Act 2022 introduced tax regulations for crypto assets in India. These assets are classified as “virtual digital assets” or VDAs under the Income Tax Act, 1961. According to Section 115BBH of the Act, any income from the transfer of VDAs is subject to a flat income tax rate of 30%.
ITR payee have to Pay Tax related to any transaction of Virtual Digital assets like Converting the Digital Token into fait currency, trading between the different digital tokens, or buying goods and services using the Digital tokens. If any income you earn from Crypto as the part of salary it will come under the Income tax slabs.
If you have not paid tax on crypto or you have forgotten, then there is no need to worry, the government will not put you in jail or impose heavy penalty, Simply you will get a notice that you have not paid tax on crypto and a time period will come within which you will have to pay tax, that's all, If your income is related to crypto then you will have to pay 30% tax plus surcharge and cess, Being the citizens of India, it's Our responsibility to pay taxes on our earnings, The Indian government has imposed excessive tax restrictions due to which Indians hesitate to enter to crypto World.
How much is the taxation on crypto in your Country?
Thankyou 😀
@gargi 🇮🇳🙏🏻