CRYPTO TAX 5 RULES TO KNOW

CRYPTO TAX 5 RULES TO KNOW


New tax rules for virtual assets, like cryptocurrencies and NFTs, will be in effect from 1st April 2022.
As announced during the budget speech by finance minister Nirmala Sitharaman, Under the Finance Bill 2022.

All gains from trading in cryptocurrencies and similar digital assets will now be taxed at a flat 30 percent.
While another 1% TDS will be calculated when any such transaction takes place.


Here are 5 rules for cryptocurrencies and NFTs you should know before Investing in a Cryptocurrency

The 30 percent tax rate will be applicable not on the invested amount but on the income from the sale of virtual digital assets.

There will be no tax deduction on expenses incurred during VDA transactions, other than the cost of acquiring such assets
Any loss incurred from cryptocurrencies and NFTs will also be ignored for tax calculations. Only profits will be taxed.

Any loss incurred from virtual assets cannot be set off against other incomes from shares, mutual funds, etc.
And Loss drawn from digital assets can also not be carried forward to the next financial year.

The sale of digital tokens, at a profit or loss, will attract 1 percent TDS.
The threshold limit for TDS is 50,000 for a year, and the provisions for 1 percent TDS will be effective from July 1, 2022.

The crypto tax also applies to all virtual digital assets received as gifts.
which means the recipient will be taxed at 30 percent on the income from cryptocurrencies and NFTs.

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