Cryptocurrencies Could Attract Tax Rates Similar To Lottery, TDS Provisions

If the government does not prohibit Indians from dealing in cryptocurrencies, it could introduce a regressive tax regime for ...

If The Government Does Not Prohibit Indians From Dealing In Cryptocurrencies, It Could Introduce A Regressive Tax Regime For Cryptocurrencies, According To Taxmann.

Taxmann said in a note that a Bill was expected to be presented during the Winter Session of Parliament to regulate cryptocurrencies. However, it was not introduced

Considering the size of the market, the amount involved, and the risk coupled with cryptocurrencies, some changes may be brought to the taxation of cryptocurrencies in the Union Budget 2022-23

Among the TDS/TCS provisions, both the sale and purchase of cryptocurrencies above the threshold limit should be brought within the ambit of TDS/TCS provisions. 

It could lead to reporting in Statement of Financial Transactions (SFT). Both sale and purchase of cryptocurrencies could be brought within the ambit of reporting in the SFT. 

It could also lead to higher tax rates. Similar to winnings from the lottery, game shows, puzzle,s, etc., a higher tax rate of 30 percent is expected to be levied on 

The losses from the sale of cryptocurrency may not be allowed to be adjusted from other income and should also not be allowed to be carried forward, Taxmann said.