EconomyCryptocurrency investors may get a setback in Budget 2022!

Cryptocurrency investors may get a setback in Budget 2022!

Budget 2022 Nangia Andersen LLP’s Tax Leader Arvind Srivatsan has said that the government may consider levying TDS/TCS on sale and purchase of cryptocurrencies above a certain limit in the upcoming budget.

The government will consider levying TDS and TCS on cryptocurrency sales and purchases above a certain floor in the upcoming budget, according to Arvind Srivatsan, Tax Leader, Nangia Andersen LLP. Moreover, he suggested that such transactions be brought under the purview of specified transactions so they can be reported to the Income Tax authorities. He also argued that the proceeds from the sale of cryptocurrencies should be taxed at a higher rate of 30 percent, similar to winnings from lotteries, game shows, puzzles, etc.

In an interview with PTI on what the government should do for India’s crypto industry in the Budget 2022-23, Arvind Srivatsan noted that India has the largest number of crypto owners in the world right now. Indians are expected to invest USD 241 million in cryptocurrency by 2030, according to a report.

During the winter session, a bill to regulate cryptocurrency is expected to be introduced. This bill was not introduced, and now it’s expected the government will introduce it during the budget session. We hope that the government can introduce a regressive tax regime for cryptocurrencies if the government does not prevent Indians from investing in cryptocurrencies.”

Considering the size of the market, the amount involved, and the risks associated with them, certain changes can be made to the taxation of cryptocurrencies, such as making them subject to deduction of source tax (TDS) and tax collected at source (TCS) above a threshold. Arrangements can be made for provisions. These will also assist the government in getting a footprint of the investors.

Purchasing and selling of cryptocurrencies should both be reported in the Financial Transaction Statement (SFT). The trading companies already report uniformly on sales and purchases of mutual fund shares and units.

There is no regulation or restriction on the use of cryptocurrencies in the country at the moment. In such a case, the ‘Cryptocurrency and Regulation of Official Digital Currency Bill’ is now expected to be introduced during the budget session of Parliament starting on January 31.

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