Budget 2022 May Consider Levying TDS, TCS On Crypto Trading

ndtv.com:

Crypto trading could be brought under the ambit of reporting in the Statement of Financial Transactions.

The government could consider in the upcoming Budget levying TDS/TCS on sale and purchase of cryptocurrencies above a certain threshold and such transactions should be brought within the ambit of specified transaction for the purpose of reporting to income tax authorities, Nangia Andersen LLP Tax Leader Aravind Srivatsan said.

Also, a higher tax rate of 30 per cent should be levied on the income arising from the sale of cryptocurrency, similar to winnings from lottery, game shows, puzzle, etc, he said.

Speaking to PTI on what the Budget 2022-23, to be unveiled by the government on February 1, could have in store for the crypto industry in India, Srivatsan said currently, India has the highest number of crypto owners globally, at 10.07 crore and as per a report it is expected that the investment by Indians in cryptocurrency could touch USD 241 million by 2030.

"A bill was expected to be presented during Winter Session of Parliament to regulate cryptocurrencies. However, it was not introduced, and it is now expected that the government may take up this bill in the Budget Session. If the government does not prohibit Indians from dealing in cryptocurrencies, we expect that the government could introduce a regressive tax regime for cryptocurrencies," he noted.

He said considering the size of the market, the amount involved, and the risk coupled with cryptocurrencies, certain changes may be brought in the taxation of cryptocurrencies like bringing them under the provisions of tax deducted at source (TDS) and tax collected at source (TCS) above a threshold limit which will help the government get the "footprints of the