The government may consider in the next budget the use of TDS/TCS for buying and selling of cryptocurrencies above a certain threshold and these transactions should be combined under a specific transaction for reporting purposes with tax authorities, Tax Leader Nangia Andersen LLP, Mr. Srivatsan, Srivatsan said.
In addition, a tax rate higher than 30% will be levied on income from the sale of cryptocurrencies, such as winnings from the lottery, video games, quizzes, etc., – she stated.
Speaking to PTI on Budget 2022-23, which will be announced by the government on February 1st, is possible in the crypto industry in India, Srivatsan said that currently, India has several coin holders.
Cryptocurrency is the highest in the world, at 10.07 crore, and According to a report predicting Indian investment in cryptocurrencies could reach $241 million by 2030.
“A bill will be introduced during the winter session of Congress to regulate cryptocurrencies. However, it has not been introduced and the government is now expected to address the bill during the budget session.
If the government does not ban Indians from trading cryptocurrencies, we expect the government to introduce a regressive tax regime on crypto,” he noted.
He stated that given the size of the market, the amount involved, and the risks associated with cryptocurrencies, certain changes could be made to the taxation of cryptocurrencies, such as subject to withholding tax (TDS) and tax on source terms. (TCS) above a threshold will help the government get an “investor fingerprint”.
Cryptocurrency purchases must be declared in the statement of financial transactions (SFT). He said: Trading companies have made similar reports on the buying and selling of stocks and mutual fund units.
To monitor high-value transactions made by taxpayers, income tax law has the concept of SFT or reporting account. This helps the tax authority to collect information on several regulatory large transactions made by any individual during the year.
Financial institutions, corporations, and stock market intermediaries are covered by the SFT. Srivatsan said that similar to winnings from the lottery, video games, puzzle games, etc., a tax higher than 30% should be levied on income from the sale of cryptocurrencies.
Ahead of the winter session of Parliament that ends on December 23, the government has listed a cryptocurrency regulation bill for introduction. The bill comes amid concerns about the alleged use of these currencies to lure investors with misleading statements.
Currently, there are no regulations or bans on the use of cryptocurrencies in the country.
The “Official Cryptocurrency and Digital Currency Regulation Bill” is now scheduled to be introduced during the Parliamentary budget session starting January 31. possibly as part of the budget for the year 2022-23.