New Delhi, February 1 (PTI): Finance Minister Nirmala Sitharaman on Tuesday said only RBI-issued 'Digital Rupee' will be recognised as currency and the government will levy 30 per cent tax on gains made from any other private digital assets from April 1.
The Budget 2022-23 also proposed a 1 per cent TDS on payments towards virtual currencies beyond Rs 10,000 in a year and taxation of such gifts in the hands of the recipient. The threshold limit for TDS would be Rs 50,000 a year for specified persons, which include individuals/HUFs who are required to get their accounts audited under the I-T Act.
Also, no deduction in respect of any expenditure or allowance shall be allowed while computing income from transactions in such assets. It has also specified that losses from the transfer of virtual digital assets will not be allowed to be set off against any other income.
The provisions related to 1 per cent TDS will come into effect from July 1, 2022, while the gains will be taxed effective April 1.
Briefing reporters after the presentation of the Budget, the minister said the name of the Digital Rupee by the RBI will be given later and only that will be recognised as a currency. Rest all private cryptocurrencies and virtual digital assets would be subject to tax.
"The central bank will be issuing a digital currency. A currency is a currency only when it is issued by the central bank, even if it is a crypto. But, everything outside of that which all of us refer to as currency, they are no currencies. We are not taxing currency.
Bringing in a scheme for the taxation of virtual digital assets in the Budget, she said there has been a phenomenal increase in transactions in virtual digital assets. The magnitude and frequency of these transactions have made it imperative to provide for a specific tax regime.
The TDS has been proposed to track the money trail in cryptocurrencies, she said. The gift of the virtual digital asset is also proposed to be taxed in the hands of the recipient. "Transactions happening in cryptoworld will be taxed," she said. According to the Budget memorandum, TDS will apply in case the transfer is made in cash or in other virtual currencies.
Disclaimer: This story is auto-generated from news agency feeds and has not been edited by The Morung Express.
Source: PTI
