Accounting Equation

The new laws around taxing virtual digital assets (including cryptocurrencies) in India have been welcomed with open arms by the crypto community. The 30% tax may seem high to some, but it shows that Cryptocurrencies are now being taken seriously by the government.

The Budget for 2022 is proposing that a new tax, Section 115BBH, be introduced for those who derive their income from the trading of virtual assets. This would include individuals whose taxable income includes any profits from the sale of such assets. Income from trading virtual digital assets will be taxed at 30%, in addition to the normal tax.

the total tax liability of an individual with cryptocurrency investments will be the sum amount of income gained from transfer or transactions on those assets and what they would have paid in taxes had they not made those gains.

The government is imposing a 30% tax on those who sell their digital assets, including cryptocurrency and non-fungible tokens. As per the Budget Memorandum, individuals who have an investment in crypto are required to divide the total gross income in two parts. Income from Crypto currency will be taxed at the rate 30%  and remaining income at normal applicable tax rate.

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