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Cryptocurrency: The government earned a huge amount by imposing TDS only on cryptocurrency transactions

Cryptocurrencies: From July 1, 2022, the government had announced the imposition of TDS on the purchase and sale of crypto to find investors to invest in cryptocurrency. Since the implementation of the TDS recovery rule on all virtual digital assets including cryptocurrencies, the government has earned Rs 60.46 crore as tax. The government has given this information in the Parliament.

In a written reply in the Rajya Sabha, Minister of State for Finance Pankaj Chowdhary said that since the implementation of the provision of TDS, 318 direct tax invoices amounting to Rs 60.46 crore have been received under TDS code 194 under section 194S of the Income Tax Act, 1961. He said that crypto assets are not regulated in India. And the government does not register any crypto exchange.

From April 1, 2022, the rule of 30 percent income tax recovery along with surcharge and cess came into force on the transfer of all cryptocurrencies like bitcoin. After this, it was announced to impose 1% TDS (Tax Deducted At Source) on payments made on transfer of Virtual Digital Assets (VDAs) i.e. cryptocurrency and non-fungible token (NFT). 1 percent TDS was imposed on transactions above Rs 10,000. If the buyer does not have PAN at the time of transfer of cryptocurrency, then there is a rule to levy tax at the rate of 20 per cent. And if the buyer has not filed income tax return then TDS has to be paid at the rate of 5%.

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Not only this, from July 1, 2022, TDS will have to be paid on all crypto transactions whether it is sold at a profit or at a loss. Meaning, investors who do not sell cryptocurrencies profitably will also have to pay tax. Investors investing in such crypto will have to pay one percent TDS so that the government can trace the whereabouts of those transacting in cryptocurrency.

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