VDAs come under the definition of ‘property’ under section 56 of the Income Tax. This section is related to ‘Income from other sources’. Transactions in VDA attract TDS of 1% under section 194S of the Income Tax Act. The central government has also issued guidelines related to the implementation of TDS. The government has also issued an order on TDS for transactions taking place off an exchange.
In order to clear the confusion regarding tax on cryptocurrencies, the Central Board of Direct Taxes (CBDT) is preparing a list of FAQs. Profits from crypto trading are taxed at 30 percent. Along with this, TDS of 1 percent will also have to be paid on every crypto transaction. CBDT chief Sangeeta Singh had recently told that the answers to these questions will be released in July. Its purpose is to clarify the situation regarding this tax for the people associated with the crypto segment. CBDT is the apex body controlling tax related matters. Experts and firms related to the crypto industry have requested the central government to consider reducing the tax of 30 percent on profits from crypto.
Tax authorities plan to place crypto activities in the category of services that attract the highest Goods and Services Tax (GST) of 28 per cent. The GST Council has assigned a committee to study various crypto activities like trading, staking and wallets for tax purposes. A proposal in this regard can be presented in the next meeting of the GST Council. The GST Council may consider linking crypto transactions with betting activities such as gambling, lottery, betting and horse racing.
Cryptocurrency prices in Indian exchanges
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