Most of the crypto industry and tax experts are expecting that Budget 2022 will introduce rules for the taxation of cryptocurrency income.
Some experts think that Finance Minister’s Budget Speech 2022 may not directly address the cryptocurrency matter they are not sure whether Finance Minister touch this issue in the Budget speech, over 20 experts who participated in a pre-budget survey by FE Online.
The government cannot afford to miss out on the potential collection of over Rs 3000 crores of tax liability generated by the recent Bull Run Gaurav Mehta, Founder of CA tax, an online crypto auditing, and taxation software told FE Online.
The government has the opportunity to increase the tax base and increase tax revenue numbers by incorporating amendments about crypto in the existing tax framework.
As per estimates, cryptocurrency investments by Indians have crossed Rs 6 lakh crore and the number of investors has grown exponentially to over 10 crores though these numbers can be debated may not users have an average investment of more than Rs 5000.
As most of these investments may be small and Micro, the government may not be prepared to go for a tough clampdown.
The clarity on cryptocurrency taxation is awaited but it is unlikely to materialize till the Cryptocurrency Bill is passed in the next Parliamentary session.
India is considered cryptocurrency as an asset class, levying short-term capital gains tax if the holding period is less than three years.
Unlikely the Cryptocurrency Bill is to be introduced during the budget session, it is expected that in the upcoming budget.
Some broad indications may be revealed on the contemplated regulatory framework e.g. the extent of the ban on cryptocurrencies, its treatment as a legal tender, permissibility to trade, etc.
Upcoming Budget 2022 is expected to address the taxation-related concerns of the Crypto industry. The concerns that individuals are income tax and capital gains tax rates on crypto profits.
GST as per the underlying GST on goods and services involved can be levied. While we all are hopeful and waiting for a progressive regulatory framework for the crypto ecosystem.
Itself the budget has the opportunity to at least provide complete clarity for tax and reporting of these transactions.
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