The fine print of the Cryptocurrency tax in India is out, so let us look at the tax rates for different types of transactions in the crypto world.
Cryptocurrency tax guidelines for exchanges
Mostly, people buy and sell cryptocurrency through an exchange. The Government of India has imposed a TDS on the buying & selling of VDAs or crypto exchanges. Here an investor has to do nothing except pay extra charges and hopes that this TDS is credited back as a refund. Below is an image of TDS imposed on various types of crypto transactions by a popular exchange named Wazirx in India.
These are one set of people who are traders & investors which everyone could be, but there are other sets of people who are miners and there are other people who consider it a business. Then there are others who get their salaries in the form of cryptocurrencies. From the point of wallet apps & exchanges the TDS rates are defined and clear where a user does not have to do anything, just pay extra tax for every order you place, a nightmare for a trader.
Cryptocurrency tax for salaried people
In this section, we are talking about the people working or employed in blockchain technology. These people receive their salaries as “Virtual Digital Assets”. The term Virtual Digital Assets or VDA is used to describe a broad category of digital assets like cryptocurrency, NFTs or any digital asset like gaming coins etc that derives their value from virtual creations. The price of these VDAs can fluctuate over a period of time and this is the bone of contention.
- There is still no clarity if you’re paid cryptocurrency as the salary then how will you be taxed? Will you be taxed at 30% or according to your income slab not clear in multiple articles?
- Mining will involve a tax rate of 30% flat also there is no cost of acquisition
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