May 25, 2024

Crypto Tax in India 2022: New tax rules from 1st April

Crypto Tax

Crypto Tax

Crypto Tax in India 2022: New tax rules from 1st April. Things to consider while Trading/Investing/Dealing with Crypto in India.

Some Major Highlights from the Crypto Tax laws in India:

Cryptos received from Salary, Consultancy, Airdrops, Mining, Yield Farming, Staking, Lending, Interest

Receipt date and the Market value is added as income, taxable as per tax slabs. If you sell at a  higher value than the receipt value tax applies 30%. If the sell value is lower than the receipt value then no additional tax, the receipt value is added as per your tax slabs.

Crypto Mining – Infrastructure cost isn’t a deduction. Electricity cost can be added in deduction.

Trading and Investing 

CFD Trading Tips for Rising and Falling Markets | AvaTrade

For Trading and investing, the concept is very different and aggressive. There is a flat 30% tax on every profit. You can’t set off your losses. Profit for every trade made. Fees can’t be taken as deduction.

Common understanding

Profit = sale price – cost of purchase. Sell/transfer from one asset to another is considered as sale. For e.g. 1 Bitcoin exchanged for X no of Ethereum.

TDS (Tax deduction at source), Cess, Surcharge

What is TDS, Meaning, Returns and Sections Under Income Tax

Over and above of 30% tax, there is a surcharge, 1% TDS and applicable cess. The TDS part starts from 1st of July 2022. No TDS applied when you deal with International exchanges like Binance/ etc. as well as Dex (Decentralized exchanges).

Crypto Gifts – Blood relatives and others

12 Best Websites for Unique Gifts in 2022 • Our Globetrotters

Receipt of Crypto from: Blood relatives – Exempted Others: Exempt up to Rs.50K in a year (If crosses, full taxable at slab rates) b. On Sale: 30% tax on Profit = Sale Price – Cost to previous owner/Amt taxed as Gift Income

These come into effect from today. i.e. 1st April 2022. However, I suggest that investors to not sell at loss and move out of the market. Some misconceptions or maybe some investors may think to evade tax. I feel it’s better to disclose and pay tax rather evading and then paying penalties. There are a lot of ways how Govt has started tracking crypto transactions around the world.

HODL is the key, short term trades maybe avoided. Better to wait for further clarity. Treat crypto investment as long term, specially if you are from India. Hope with more Govt understandings things may improve.  

If you have any questions or if you need any help, do let me know. You can connect with us on Social Media as well. If you are planning to start investing do check out Binance and WazirX. Check our Cryptocurrency tab for more related stories.

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