DEA, Revenue Department & Reserve Bank Draft FAQs Document on Crypto Taxation Aspects With Digital Assets Definitions & Transaction Explanations

1 min read

dea crypto taxation

A government official said that the government will be working on a FAQ about cryptocurrency taxation which will provide nuanced clarification on the applicability of income tax and GST to virtual digital assets..

Officials from the Department of Economic Affairs (DEA), RBI and Revenue Department are working on drafting Frequently Asked Questions (FAQ) which will also be reviewed by the law ministry.

A FAQ is being drafted on cryptocurrency and digital assets, the official told PTI. A law ministry opinion is being sought to ensure that there is no loophole in FAQs, which are only for informational purposes and do not have any legal sanctity. 

The DEA, Revenue Department and the Reserve Bank are working to clarify the taxation aspects not only for field tax offices, but also for those who deal with virtual assets such as cryptocurrencies.

The 2022-23 Budget clarifies the taxation of crypto assets.

Such transactions will be subject to a 30 percent income tax, plus cess and surcharges, starting April 1, in the same manner as winnings from horse races or other speculative transactions.

A one per cent TDS (tax deducted at source) is also proposed in the Budget 2022-23 on payments towards virtual currencies exceeding Rs 10,000 per year, and such gifts are taxed in the hands of the recipient.

A 1 percent TDS will take effect on July 1, 2022, and gains will be taxed on April 1, 2023.

It is likely that the GST FAQ will shed some light on whether cryptocurrency is a good or a service.

A Goods and Services Tax (GST) of 18 per cent is currently levied on crypto exchanges as a financial service.

Cryptocurrencies are not explicitly classified in the GST law.

An actionable claim is a claim which can be made by a creditor, for any type of debt other than a debt secured by mortgage of immovable property.

In addition to that, the officials are preparing a legislation to regulate digital assets, but no additional information or draft version has been shared with the public yet.

Via this site.

Have A Story? Get Featured On Ecocoins Plus 100+ More Exclusive Crypto News Sites