30% Crypto tax – Highest tax band in India

30% Crypto tax – Highest tax band in India

Team Ambitiousbaba are here with a Current Affairs Special Series. In this series, candidates will be introduced to current affairs topics daily, which will not only improve their general awareness but also will ensure that the candidates do not lack in any current affairs topic. Today’s Current Affairs topic is “30% Crypto tax – Highest tax band in India

Finance Minister Nirmala Sitharaman has presented the Budget in parliament in which tax levied on income from digital assets will be at 30%. With this 30% tax on crypto currencies as well as digital assets it is the highest tax band in the country.

What are the Crypto currencies?

A crypto currency is a type of digital asset based on a network that is circularized across a large number of computers. This decentralized structure permits them to exist outside the control of governments and central authorities.

With budget consideration any income from transfer of any virtual digital asset shall be taxed at the rate of 30 per cent is final. No deduction in terms of any expenditure or allowance shall be granted while computing such income, except the cost of acquisition.

The Modi government has prepared legislation to regulate crypto currencies usage after initially provisioning to ban crypto currencies. FM Nirmala Sitharaman said at the press conference after she presented the Budget that crypto currencies will be treated as digital assets even currency rests only with the RBI will be treated as crypto assets and will see 30% tax.

Losses from transactions in virtual digital assets cannot be compensating against other income. For crypto currencies given as gifts, the tax will be obtained by the recipient. A 1% TDS (tax dedicated at source) will be levied to all digital asset transactions.

RBI’s view on Crypto:

The RBI has sounded “serious concerns” around private crypto currencies on the grounds that these may create financial instability.

The Finance Minister announced that the RBI will introduce a digital rupee based on block chain technology.

With the introduction of a central bank digital currency, it will give a big boost to the digital economy. Digital currency will also create a atmosphere for a more efficient and cheaper currency management system.

There are an approximation 15 million to 20 million crypto currency investors in India, with total crypto holdings of around ₹ 40,000 crore ($5.29 billion).

Question & Answer:

Q1. What is the rate of tax on transfer of income from digital assets?

Ans. 30%

Q2.  How much percent TDS (tax dedicated at source) will be levied to all digital asset transactions?

Ans. 1%

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