India's Own Crypto Currency & Taxation of Crypto Explained

Digital Rupee currency using blockchain will be issued by the RBI starting 2022-23 to boost the digital economy.

So we have some clarity on the cryptocurrencies and thus it make sense to avoid trading in other cryptocurrencies.

At times one wonders that why people run after these cryptocurrencies which have such a mega moves in a single day. The young crowd should understand that you can make more than that profit using the Bank Nifty Option tips where you can easily make up to 30% intraday profit without much risk as you are risking in crypto. 

Key highlights regarding Crypto from FM’s budget speech today:

-Any income from transfer of crypto to be taxed at 30% 

-No deductions in respect of any expenditure or allowance is allowed except for the cost of acquisition. (That is the purchase cost/price of the digital currency)

-Losses can not be set off or adjusted.

-To capture transactions, TDS is introduced which will monitor payments at 1%

-Gift taxes if any will be the liability of the recipient

The problem is with the people is that the moment you tell them don't do this and it is not good and they will say no no we want to do this and Burn our hand and only then we will get out of the cryptocurrency. The choice is yours because zindagi mein kuch Na koi chhutna lajmi hai and you cannot have your hands full with profit always.

Risk Another perspective

A flat rate of 30% will be levied on the income from virtual digital assets regardless of the tax slab

Indexation of the gains is not allowed.

The losses or gains arising from digital virtual assets cannot be set off with any other gains

losses cannot be carried forward

Digital virtual assets will be designated as property for the purposes of gifting and will be taxable at the same rate in the hand of the recipient. No recipient will be excluded from taxation.

In order to tax crypto transactions, a 1% TDS will be levied. Our understanding is that this 1% is within the overall 30% tax. The monetary threshold above which the TDS is applicable will be intimated later.

We recommend crypto investors rethink their strategy between now and March 31st 2022. They need to ask, is the risk premium after-tax worth their time and effort? The crypto