In India, 30% tax to be levied on profits from Cryptocurrency, digital assets from April 1

The last date for filing your Income Tax Return (ITR) for FY 2020/21 (AY 2021/22) is March 31. It is to be noted that a number of changes in the income tax rule announced in Budget 2022 will be implemented across the nation starting April 1, 2022. The new income tax law will have a levy on cryptocurrency and other digital assets. As per the Union Budget 2022 presented by the Finance Ministry, all gains on digital assets including cryptocurrency will be taxed at 30 percent.

While cryptocurrencies like bitcoins will have a tax rate of 30 percent, a 1 percent TDS and gift tax will be placed under certain conditions to be paid by the receiver of digital assets as gift. The Finance Ministry had also revealed in the Union Budget that profits from trading in virtual assets like non-fungible tokens (NFTs) would also be taxed at a flat 30 percent from April.

Tax on cryptocurrency

The tax applied by the Centre will remain applicable to all virtual digital assets (VDA) and their earnings. The taxes will be levied on earnings from Bitcoin to NFTs. According to the budget, there will also be a 1 percent tax deducted at source (TDS) for every transaction involving crypto and other virtual assets.

To put it in simpler terms, every crypto investor in India will face a 30 percent tax on the profit he/she earns from crypto transactions. Meanwhile, reports claim that several investors are now transferring their crypto assets to private wallets outside of India to avoid the new taxation policy.

ITR filing last date on March 31

The last date for filing your Income Tax Return (ITR) for FY 2020/21 (AY 2021/22) is March 31. The original deadline was July 31, which was extended because of COVID-19 and the date was revised to 31 December 2021, then 15 February 2021, and finally 15 March 2021. The last date of March 31 for filing an ITR is under an income tax law that gives taxpayers three months window to file a belated ITR. If citizens miss filing the ITR before the deadline then it could lead to a penalty and demand for interest payment from the income tax department.

(With inputs from agencies)