The tremendous craze for cryptocurrency in India is growing at an unexpectedly fast pace. The increasing popularity is constantly compelling investors across the country to consider it an extremely beneficial investment option capable of giving substantial returns in an extremely short period of time. Amongst the investors from all the age groups, the young investors who wish to build a fortune with minimum efforts and in minimum time are especially excited about investing in cryptocurrency.
However, it is extremely important for an investor to know that high returns come with high risk and this risk may even lead them to lose their hard-earned money.
What are Virtual digital assets?
Virtual digital assets are basically virtual assets that are created through cryptographic means or other virtual asset creation ways. Unlike physical assets, these are in the form of information, code, numbers, or tokens. They act as a digital representation of value and have inherent value. Virtual digital assets are recognized by various investors and they allow the storage and transfer of its units or tokens.
What’s the tax on VDA?
Currently, all virtual digital assets like cryptocurrency are taxed at the rate of 30%.
What about tax on gains made before 31st march?
All investors possessing any kind of virtual digital assets are required to declare their income from the VDA and then their income will be taxed as per the assessment of the assessing officer.
Also Read: Union Budget 2022 Highlights – Economy, Digital assets, Infrastructure
How much TDS is applicable?
If the transaction amount is exceeding 10,000/- then TDS is deducted at 1%. However, for specified persons, the threshold is 50,000 instead of 10,000.
Can it be set off against loss from the sale of digital assets?
Yes, the investors can set off the loss from the sale of digital assets.
Can it be set off against loss from the sale of other capital assets?
No, the investors cannot set off the loss from the sale of other capital assets.
Can you set off Loss against any other income to reduce your tax liability?
No, the investors cannot set off against any other income to reduce your tax liability.
What will happen if I gift Digital Assets to anybody?
All virtual digital assets in the form of gifts will be taxed in the hands of the recipient.
How much tax a recipient will have to pay?
All investors will be taxed as per slab rates.
Please note
- It will be taxable only if gift amount exceeds 50,000
- It will be tax free if received from family
- It will be tax-free if received on the occasion of marriage for bride and bridegroom.‘
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