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The Central Board of Direct Taxes (CBDT) is going ahead with its plan to release frequently asked questions (FAQs) around the system of crypto tax announced this year in India. As per the chairperson of CBDT, Sangeeta Singh, these FAQs will be published before July 1 which is 21 days away at the time of writing. The aim of publishing these will be to clear the confusion that resides within the crypto community of the country, around crypto tax.
CBDT, under the Ministry of Finance, governs the tax regime of the country and it is upon them in clearing the confusion around the announced tax on virtual currency. Sangeeta Singh, speaking from an event in Delhi hosted by the Income-tax Department, said, “We are working on the FAQs for clarity on cryptos, and we will release it before July 1.”
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— Kashif Raza (@simplykashif) June 8, 2022
Crypto profits are eligible for tax deductions from this April according to the initial announcement by Nirmala Sitharaman, Finance Minister Of India. A 30 per cent tax on profits generated from crypto trading, is being levied as per the mandated rules. The tax apparently would keep a tight check on cryptocurrency trading. However, officials believe that once the one per cent Tax Deducted at Source (TDS) comes into action on and from 1st July 2022, it will be easier to keep track of crypto transactions.
The volume of cryptocurrency transactions nosedived by 70% after the tax system came into effect, reports a research firm Crebaco. India announced the tax rules to keep a trace of the virtual transactions of digital virtual assets. The Indian Government aims to curb the misuse of digital currency in the potential financing of terror. Money laundering through digital assets is also another area of concern.
Meanwhile, Asia is witnessing constant growth, owing to the affluent investors, in the crypto sector. The crypto sector has grown in countries like India, Vietnam, China, Indonesia, Japan, Malaysia, Singapore and Thailand, reported Accenture. India contributes seven per cent of crypto and NFT holdings in Asia, according to the same report.
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