India’s cryptocurrency tax kicks in from April

 what investors need to know?

Beginning April 1, a 30% tax will apply to all forms of virtual digital assets (VDA), or crypto assets, that are sold at a profit.

A 1% TDS will be held back each time you sell a crypto asset, and will be set-off against the crypto tax at the end of the year.

The crypto tax cannot be set-off against other business expenses.

India’s Finance Minister has reiterated that the existence of a targeted tax does not give crypto ‘legal status.’

From April this year, cryptocurrency gains will be taxed at 30% – which is the highest tax bracket

for example, a person who buys a crypto asset at ₹10,000 and sells it at ₹12,000 would show a profit of ₹ 2,000 and pay 30% tax, which is ₹600.

The government has mandated at 1% TDS on all crypto transaction redemptions, to be deducted presumably by the crypto exchange one uses.

Legality of crypto is not assured by the targeted tax

The proposed framework for regulating crypto is yet to be presented in Parliament, but the finance ministry is said to be working on a consultation paper

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