Crypto News
4 Feb 2022

Crypto Tax Applicable to Transactions Made before April 2022: CBDT

Savan

Crypto transactions that are done before April 2022 would also be subject to taxation as specified in the annual budget, JB Mohapatra, the Chairman of the Central Board of Direct Taxes (CBDT), clarified.

“The taxability of the crypto-currency is certain for this financial year too. Crypto investors should know that the transactions done before April 2022 will not be tax-free,” Mohapatra told ANI.

In her Budget 2022 speech, Finance Minister Nirmala Sitharaman announced a flat 30% tax on income earned through virtual digital asset transactions. The announcement created confusion among crypto investors regarding the cut-off date when the new tax would become applicable.

However, the statement from the Chairman of CBDT means that the new tax laws would apply retrospectively.

A heavy rate of 30% added to the retrospective nature of taxation wasn’t received well by crypto investors.

Petition to Reduce Crypto Tax

Simultaneously, a petition seeking to reduce the proposed crypto tax and bring about “more reasonable crypto policies” was started by Aditya Singh, a YouTuber and crypto influencer. Nearly 30,000 people have signed the petition, as of 3 February 2022, and the demands include stopping the treatment of investments in digital assets as gambling. 

It is not illegal to buy and sell cryptocurrencies. We have now put in a taxation framework that treats crypto assets the same way we treat winnings from horse races, or from bets and other speculative transactions,” said Finance Secretary TV Somanathan during a television interview.

On par, many crypto exchanges in India, including CoinSwitch, have welcomed the move to tax crypto income. They believe this will legitimize crypto as a financial asset class in the short term so that it will eventually be treated on a par with other securities like stocks and mutual funds.

Disclaimer : Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. The information provided in this post is not to be considered as investment/financial advice from CoinSwitch. Any action taken upon the information shall be at user's own risk.

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Savan

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