The cost of mining cryptocurrencies is not allowed as a deduction under the Income Tax Act. This information was given by the Minister of State for Finance, Pankaj Choudhary in a written reply in the Lok Sabha. He said that the central government will decide the definition of VDA to levy 30 percent tax on income from Virtual Digital Assets (VDA).
Chaudhary said that in the country cryptocurrencies There is no regulation for this yet. The position regarding the imposition of income tax on crypto assets was clarified in this year’s budget. It was said in the budget that from April 1, 30 percent income tax and surcharge will be levied on such transactions. This will be similar to the tax on winnings from horse racing or other betting transactions. Chowdhary said that deduction is not allowed for any expenditure (except cost of purchase) for computing income from transfer of VDA. Choudhary said, “The Finance Bill also proposes to define the definition of VDA. If an asset falls under the proposed definition, then such virtual asset shall be treated as VDA for the purposes of the Act and other provisions of the Act shall apply. Will be.”
He said that the cost of mining VDA (for example crypto assets) will not be considered as the cost of purchase as it is like capital expenditure, for which deduction is not allowed in the Income Tax Act. Further, the loss on account of transfer of VDA shall not be allowed to be set off against the proceeds from transfer of any other VDA.
The budget also proposes to levy 1 per cent TDS on payment of cryptocurrencies exceeding Rs 10,000 in a year and tax on such gifts to the recipient. The limit of TDS will be Rs 50,000 in a year for people falling in the special category. These will include individual taxpayers and Hindu undivided families who are required to get their accounts audited under the Income Tax Act. government to cryptocurrencies Regulate It is also working on bringing legislation to do so. However, no draft for this has been made public yet.
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