Cryptocurrencies are part of the new flow of technology that looks to decentralized finance and makes it a truly free market. But with crypto whales eyeing to maneuver the market in their favor, it will be fascinating to see how this free market will work.
In the recent Budget announcement, J B Mohapatra, CBDT Chairman, said that the Cryptocurrency or digital virtual assets will be helping the Income Tax department estimate the extent of the crypto market in India. It will also help in understanding the investors and the type of their investments. He also mentioned that it would not be attaching any legality to any of these transactions.
The head of the IT department of India said that this is the perfect timing for the country’s taxman to set foot in this arena. On this, Smt. Nirmala Sitharaman, Finance Minister of India, has said that the government has taken into consideration a stakeholders’ consultation and decided to establish a national regulator and policy soon.
Finance Minister Nirmala Sitharaman also stated that due to the exceptional rise in virtual digital transactions, any income levied from the transfer of the virtual digital assets will be taxed at 30% with some other applicable taxes like TDS (Tax Deducted at Source).
J B Mohapatra also added that if any individual or company proclaims any profit via virtual digital trade, shall be bound to disclose the source and where they got the funds to invest, and if it all justifies, then the profit will be taxed accordingly.