CRYPTO CURRENCY TRADING

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P.Madhivadhanan (Querist)

03 September 2022 DURING THE FINANCIAL YEAR 2021-22 AN ASSESSEE WHO PURCHASED CRYPTO CURRENCY FOR RS.100000 AND SOLD WITH IN A MONTH FOR RS 108550 . hE IS HAVING TAXABLE INCOME . tAXABILITY OF CRYPTO CURRENCY FOR ASST YEAR 2022-23? AT WHAT RATE AND UNDER WHICH HEAD?

Adv. Ravish Bhatt, ADIT, CIOT

Adv. Ravish Bhatt, ADIT, CIOT (Expert)

04 September 2022 s.115BBH dealing with tax from transfer of Virtual Digital Assets(which include all known cryptos) came to be introduced in budget 2022. Provisions apply from 01.04.2022 and will result in taxation at the rate of 30% of total gains resulting from transfer of VDA without any deductions. For any transfer of cryptocurrency made prior to advent of s.115BBH, taxation will be governed per provisions of income tax act absent s.115BBH. Taxation would depend on whether the Cryptocurrency was treated by the holder as business asset or a Capital Asset. In case of treatment thereof as business asset, taxpayer will be taxed at applicable slab rate and in case of treatment thereof as Capital asset, for such currency held for more than 36 months tax will apply at the rate of 20% in terms of s.112 of the Income Tax Act, 1961. For a cryptocurrency treated as capital asset and held for less than 36 months, transfer thereof will entail tax at slab rate for assessee. You can read more at: https://www.caclubindia.com/articles/cryptocurrencies-and-taxation-thereof-under-indian-income-tax-act-1961-47526.asp Read more at: https://www.caclubindia.com/experts/cryptocurrency-profit-rate-of-tax-2878599.asp

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