Income Tax Department Prepares To Tax 30% Profits Made On Crypto Transactions

ndtv.com:

The new tax regime of cryptocurrency will fall under section 285BA and sub section (k) of IT Act.

The Income Tax Department will keep a close eye on every transaction on crypto exchanges as the 30 per cent 'crypto tax' proposed in the Union Budget comes into effect from 1st April 2022.

Income tax officials have been given direction to do so by the Central Board of Direct Taxes (CBDT), an apex body of the income tax department, officials told ANI.

A senior Finance Ministry official said, "Our officers will keep a close eye on the Cryptocurrency exchanges which are around 40 in number where transactions in major coins like Bitcoin, Etherium are going on."

Officials told ANI that out of 40 cryptocurrency exchanges 10 are majorly dealing in the sale and purchase of cryptocurrencies and their turnover is between Rs 34,000 crore to Rs 1 trillion.

The official said other than crypto exchanges IT sleuths will also track the crypto transaction through reporting entities.

The new tax regime of cryptocurrency will fall under section 285BA and sub section (k) of IT Act. Where under rule 114 E, persons are required to report the prescribed financial statements in the statement of financial transactions (SFT), any person who is liable for audit under section 44AB (Like Individuals, HUF, firms, etc.).

The official said that by July 1, 2022, when the department will start deducting 1 per cent Tax Deducted at Source (TDS) on crypto transactions, it will become easier for the department to track crypto transactions.

On February 2 JB Mohapatra, Chairman, Central Board of Direct Taxes (CBDT), in an interview to ANI said that tracking and tracing these crypto investors is very difficult. The TDS provision will now help in tracking and tracing the