Key Highlights of the New Crypto Tax Rules
• Flat 30% Tax on Gains: All profits from trading, selling, or spending crypto assets are taxed at a flat rate of 30%.
• This applies irrespective of the investor's income tax slab.
1% TDS on Transactions
• A 1% Tax Deducted at Source (TDS) is mandatory for all transactions exceeding ₹50,000 annually for individuals and ₹10,000 for businesses.
• Exchanges automate this for domestic trades, but P2P and international deals require individual compliance.
No Deductions Allowed
• Investors cannot offset losses against other gains or deduct expenses, except the acquisition cost of the asset.
ITR Disclosure
• Investors must report all crypto gains under a dedicated "Virtual Digital Assets" section in their Income Tax Return.
Tax-Free Scenarios
• Holding crypto in personal wallets.
• Transferring assets between personal accounts.
• Gifts under ₹50,000 or from close relatives.
Penalties for Non-Compliance
• Non-payment or incorrect TDS filings can lead to hefty penalties or even imprisonment.
Regulatory Framework
• This regulatory framework highlights India's cautious approach toward crypto, ensuring it becomes a legitimate financial tool while deterring misuse.
