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Cryptocurrency in India
The announcement of the budget has sparked conversations about cryptocurrency all over the internet, with many people claiming that it has now been legalized in India. This, however, is not quite accurate. What the recent budget has included is a new regulation requiring a 30% tax to be paid on cryptocurrency.
Taxation on Cryptocurrency
Despite the rumors that are circulating, India’s Union Finance Minister, Nirmala Sitharaman, did not declare that cryptocurrency has become legal. What she did mention is that a 30% tax will be required for cryptocurrency.
So, despite the conversation around it, the fact is that while cryptocurrency is not strictly legal, it is also not illegal. It’s somewhat of a gray area, with the government seeking to regulate and tax it rather than ban it outright.
Crypto as an Asset Class
In her announcement, Sitharaman made it clear that the only legally recognized currency in India is that issued by the Reserve Bank of India (RBI). This means the RBI is going to introduce its own digital currency, and this will be the only officially recognized virtual currency in the country. Any other types of virtual currency, such as Bitcoin or Ethereum, will fall under the category of asset class, rather than currency.
Understanding the New Tax Rules
The new tax rules on cryptocurrency are not as straightforward as some might think. Prior to this, we had two types of capital gain tax – long-term capital gain tax and short-term capital gain tax. In terms of stocks, anything held for more than a year was considered a long-term gain, and anything held for less time was short-term.
Now, cryptocurrency has shaken up these rules. For crypto, long-term is now considered to be anything held for more than two years. Short term is anything less.
So, for those who have held on to Bitcoin or Ethereum for two years, whatever gain they have will be taxed at 20%. For short-term gains, the tax rate is 30%.
Tax on Every Transaction
Remember, the new tax rule applies to every transaction related to cryptocurrency. Whether you’ve bought a new set of Bitcoin or gifted some to a friend, all will be taxed.
One thing worth noting is that if you gift someone cryptocurrency, the receiver will also need to pay the tax. So, let’s say you gift your friend a cryptocurrency worth ₹1 lakh, your friend will have to pay a 30% tax on it, which amounts to ₹30,000.
Understanding TDS: Tax Deducted at Source
Along with regular tax, the new law also introduces Tax Deducted at Source (TDS) on cryptocurrency. TDS is the tax deducted while making a payment. In this case, whenever you withdraw your cryptocurrency from your digital wallet to a bank account, the cryptocurrency exchange will deduct 1% as TDS.
Here’s the good news for you: the 1% TDS that is deducted by your exchange can potentially be refunded when you file your Income Tax Return (ITR). The government’s strategy with this law is to increase the filing of ITRs, compelling every person who trades in crypto to file ITR.
Conclusion
To sum up, the Indian government has neither declared cryptocurrency illegal nor legal in the recent budget. However, a 30% tax has been imposed on all cryptocurrency transactions. Whether you’re cashing in big on your Bitcoin investment or gifting a close friend some cryptocurrency, you will have to pay tax. Further, the government will apply 1% TDS on all withdrawals from the crypto exchange, a part of which can be refunded after ITR filing. So, while the world of cryptocurrency may seem a little more daunting under these new regulations, it also stands on a more legitimate footing, at least from a taxation perspective. If you are interested in exploring the dynamic world of cryptocurrency further, CoinDCX, a partner of this article, provides a platform where you could start experiencing the world of Cryptocurrency.
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sir mere bybit par kuch paise hai, usko bank me laane se kya problem hoga?
Hello,
Could you please let me know if I need to pay tax if I shift my funds from one Exchange to Another?
Sir help me phle game khelta tha ak app he bdg name he chel kiya to usse 1 lakh rupye mere ACCOUNT me aaya tha kya mughe 30% tax dena hoga😢😢😢😢
DO we have to pay tax if we lend crypto while holding ?
Now 2024 Bitcoin and cripto is under RBI regulatory and it's legal in india
BJP hatao
Thank you for knowledge
Sir My annual income is less than 5 lakhs, what if I have to pay tax?
Hi sir I am amruth
Sir I have worldcoin app from that I was collecting grants around 500 dollars in worldcoin app
After that to withdraw it I used binance for withdrawal money through p2p I have withdrawl the amount sucessfully in binance now wheather should I pay the tax of 30% for withdrawal or not sir pls reply
Anyone knows about it pls reply
Sir agr limit order place krte h or fr usko cancel kr de to jo uska tax deduct hoga wo refund nhi hoga? Eg. 3000 ki payment pr 3015 rs Ige to wo 15 order cancel krne p refund hga?
Bhai agar exchange me crypto hold he long term me or profit huwa ho tab bhi tex dena padega ya jab bhi ham bechege tab Dena padega?
Is pmla applicable to all crypto even after paying the tax ? While withdrawal will we be held liable for money laundering act ?
Sir bank account band ho gya
I am using crypto to exchange money from Mexican peso to inr, how to declare profit here in this case as I am buying crypto with mxn and selling in inr immediately
Crypto me mera aaj 8rupees profit hua he kya uska bhi tax dena padega?
Aquisition cost 0 aa raha hai to crypto tax denna padega kya
From 2024🎉🎉🎉
Sir maine 2020 s crypto se hu .agar me 2025 me withdrawal krta hu jo bhi profit hota h to tab mujhe tax Dena hoga yaa every year
Sir crypto me lagaya paise agar refund kare to refund ho jata hai kya
Cdk tracker kya h
Sir criptocurrency Wale paise ko withdrawal karne se pehle tax pay krna padta h kya
Laude ka master stroke.
BJPee adani ka lauda choose
Thanks
Sir maine 10 k invest kiye hai pr samne wala tax paid amount 30% mangh rahe hai ..nhi to profile nhi milega… please help me Sir @trading in crypto I'd hai unka
Sir maine 10 k invest kiye hai pr samne wala tax paid amount 30% mangh rahe hai ..nhi to profile nhi milega… please help me Sir @trading in crypto I'd hai unka
Desh chodne ka samay aa gaya hai.
🎉🎉🎉🎉🎉🎉🎉🎉🎉🎉🎉🎉
Man lijiye maine 1 lac rupees ka crypto liya koch dino ke bad bina profits ke 1lac rupees nikal liya to kia isme bhi taxe lage ga sir
Urgent Reply
अगर लॉस हुआ है तो भी टैक्स देना पड़ेगा?
2022 to 2023 one year me mera income 2 lacks cryptocurrency me but other side income 0 he 5lacks cross nahi kiya toh muje tax dena parega?
Please reply 🙏🙏🙏🙏🙏🙏🙏🙏🙏🙏🙏🙏🙏🙏🙏🙏🙏🙏🙏🙏
Government bahut badi madrachod hai 😡😡😡😡😡
Sir please nft ke baare me puri jaankari dijiye
Sir, cryptosg me tax pahle pay karna padta h , kya , fir amount account transfer hota hai,
Pls details me samjhaye
ye 30% tax sirf profit pe lagega ya capital or profit combined lagega.
Octafx forex trading se tax kaise lega please complete expained
Bhai 150 rupey profit hua or itr filling karne jaunga to 200 rupey internet cafe wala le lega 🤣🤣
Indian gov killing crypto market.. 30% Tax 😱😱😱😱
Crypto VS UPI
Kuch samj me aa raha hai.. bhai..???
5 lakh ka andar transaction kara tab bhi tex Dana pad ta ha ???
Isse acha ban hi kar dete😊
very important topic sir
govt. Ki Maa ki Choooooottt
Sir mai P2P crypto trade krta hu usme tds ni katta mai income tax 30% hi bharunga but mujhe tds bhi bharna padega kya us time
Suppose i have invested 1lac in april 2021 and it becomes 1.70lacs in oct 2021, and i invested that 1.7lacs again in some come but if it becomes 70k in march 2022, is tax applicable on me as i gained profit and loss in 1 financial year
Hello sir kya apka mobile number mil skta hai plz sir muze apse important baat krni hai sir
Sir 5 lakh ke andar tax nahi lagega kya
Invast kar sak tahi..
GHNTA USE KRENGE HUM RBI KA DIGITAL CURRENCY
Bhai ap pvc meta coin me ajayye ab ko bahut profit hoga or Mera referal account ke bare me YouTube channel me putc lena