On Friday, Finance Minister Nirmala Sitharaman said that the government has sovereign right to tax profit made from crypto transactions and the decision on prohibiting or not prohibiting will be taken depending on the feedback from consultations. Responding to the general discussion on Union Budget, the finance minister said that she is not going to legalize it or prohibit it at this stage. Not banning or banning will come afterward, when consultants give her input.
About the profit emerging from transactions in cryptos, she said that illegitimate or legitimate, it is a different concern, but she will tax because that is a sovereign right to tax. The minister was replying to the query raised by Chhaya Verma, a Congress member, on crypto. Verma has asked about the conformity of taxing crypto.
On February 1, in her Budget speech had stated that only RBI-issued ‘Digital Rupee’ will be acknowledged as currency and the government will impose a 30% tax on profits made from any other private digital asset from April 1.
The Budget 2022-23 has suggested a 1% TDS on payments towards digital currencies above Rs. 10,000 in a year and taxation of such gifts in the hands of the receiver. The threshold limit for TDS would be Rs. 50,000 a year for specified individuals, which include persons/HUFs who are needed to get their accounts audited under the I-T Act.