Budget 2022 Declares 1% TDS on Cryptocurrency, what will be its Impact on Crypto Investors?

Union Finance Minister Nirmala Sitharaman made a huge surprise in her budget speech on Tuesday, imposing a 30% tax on cryptocurrency revenue, which has been a hot topic of discussion for a long time. In addition, it has been determined to deduct 1% TDS on cryptocurrency transactions. In addition, the Finance Minister stated that there is no set-off for losses on crypto investments, i.e., losses resulting from the transfer of a private digital asset or cryptocurrency cannot be offset against any other income.

How much of the cryptocurrency profit will be taken away?

Although the Finance Minister did not use the term cryptocurrency once in his whole budget speech, his declaration on virtual currency and digital assets is being viewed as a step in that direction. The Finance Minister said that revenue from virtual currency or digital assets will be subject to a 30% tax.

To put it another way, if you invested 1 lakh rupees in cryptocurrency and made a profit of 50,000 rupees, the government will deduct 30% tax on the profit of 50,000 rupees in the form of tax, which you earned through crypto. Rs 15000 would be transferred to the government's account from this profit. Although the government's decision to impose a 30% tax on crypto revenue is shocking, crypto investors in India see it as a positive step. This decision will make investors think carefully about where they put their money in the dangerous cryptocurrency industry.

A tax will be charged to the person who accepts the gift

Aside from that, the Finance Minister declared in his budget speech that gifting of AC property will be subject to a steep 30 percent tax. It can be viewed in this way. Let's take an example if you give someone a bitcoin present of Rs 1 lakh, the person to whom you are providing this valuable gift, i.e. the recipient, will be subject to a 30% tax. If you give him a cryptocurrency worth Rs 1 lakh, he will have to pay the government 30% of the value, or Rs 30,000, as tax.

1 percent TDS calculation on cryptocurrency transaction

Tax Deducted at Source, or TDS is a type of income tax. According to the government's notification, you would be required to pay a TDS of 1% on any cryptocurrency transaction. To put it another way, if you make a bitcoin transaction for Rs 1 lakh, 1 percent TDS will be deducted from the cash when it reaches your account. The government will receive a detailed account of all cryptocurrency transactions made from your account once TDS is deducted. In certain ways, TDS is imposed to maintain track of cryptocurrency transactions.

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