lca9aedo_cryptocurrency_625x300_09_November_21.jpg

Cryptos’ Deposit And Withdrawal Functions Disabled Until Regulations: Exchange

Cryptos' Deposit And Withdrawal Functions Disabled Until Regulations: Exchange

Cryptocurrency exchanges are in talks with government for regulations on daily transactional activities

Cryptocurrency exchanges are in talks with the government for working out regulations on the daily deposit and withdrawal activities of investors.

CoinSwitch, one of the top digital assets exchanges in the country, has said its cryptocurrencies’ deposit and withdrawal functions will remain disabled until regulations are put into place.

The exchange said this after a few investors complained on Twitter about not being able to access their accounts for the past few weeks.

In response to complaints, CoinSwitch tweeted, saying, “the crypto deposit/withdrawal function will remain disabled until we bring in the regulation, as we are already in talks with regulators and policymakers.”

That development adds to a long list of uncertainty about the outcome of the proposed digital assets legislation outcome.

The bill is delayed, with reports suggesting the government will wait for a global consensus before enlisting it in the Parliament.

While there is no official data on cryptocurrency investments and transactions in India, a conservative estimate suggests around 20 million investors with roughly $6 billion in holdings, with a large market base yet to be tapped into.

Industry experts believe that reforms to the bill with more comprehensive consultations can make India a crypto hub and forefront of blockchain tech.

While the government had previously said it aims to promote underlying technologies such as blockchain, in the budget, the government imposed a steep 30 per cent tax on income from trade in cryptocurrencies and a 1 per cent TDS levy on every such transaction, starting from April 1, 2022.

That decision was announced in the union budget for 2022-23 by Finance Minister Nirmala Sitharaman.

Also, the new tax clarification that digital assets’ losses incurred in a transaction cannot be offset from profits made through another transaction has received a lot of criticism.

(Disclaimer: Coinswitch is an advertiser on the NDTV Network)




Source link

bitcoin_cryptocurrency_markets_new_jan_unsplash_large_1643090561637.jpg

How Will Your Crypto Be Taxed?

India announced plans to begin taxing income from digital assets earlier this year, while also setting out plans for the launch of its own digital currency. The government unveiled a tax of 30 percent on the sale of crypto assets in a move that brings more clarity to the regulation and tax treatment of cryptocurrencies following months of uncertainty about their legal status in the country. Budget 2022 has thus removed most of the FUD (Fear, Uncertainty, and Doubt) from the crypto sector.

In this post, I will answer some of the most important questions around crypto taxation in India.

Do note that this information is provided for educational purposes and is NOT legal or financial advice.

How will crypto profits be taxed?

The government has defined “virtual digital assets”. The term has a broad definition and includes all types of crypto assets/ currencies such as:

  • Ready money for example, Bitcoin (BTC)
  • Open Blockchain Tokens, for example, Wrapped Asset Token (WRAP)
  • Hush/ privacy coins, for example, Monero (XMR)
  • Application coins, for example, Filecoin (FIL)
  • Security tokens, for example, Exodus
  • Non-Fungible Tokens (NFTs), for example, Crypto Kitties
  • Algorithmic stablecoins, for example, Frax (FRAX)
  • Governance tokens, for example, Uniswap (UNI)
  • Public Blockchain natives, for example, Ether (ETH)
  • Asset-backed tokens, for example, Tether (USDT)
  • Lending / Borrowing cryptos, for example, Aave (AAVE)

A tax of 30 percent on the income from the transfer of “virtual digital assets” is applicable.

This tax is payable on your profit, which is calculated after deducting the “cost of acquisition” that could include the purchase price of the crypto and the gas, transaction fees.

Will free cryptos from airdrops, learn and earn schemes, and play-to-earn games be taxed?

Axie infinity sky mavis large

Free crypto that you earn from airdrops, learn and earn schemes, and play-to-earn games will be considered as a gift. Under the existing income tax laws in India:

  • Money received as gifts from relatives (such as a spouse, siblings) is not taxable.
  • Money received as gifts from friends is taxable.
  • If the amount of money gifted to you in a financial year is less than Rs. 50,000 then it will not be taxed.
  • Money received as gifts on your marriage or under will/ inheritance is not taxable.
  • Money received on your birthday, anniversary, etc. is taxable.

So depending on the above conditions, you may have to pay tax on these free cryptos.

Example: You have received 100 ABC crypto (worth Rs. 75,000) from a play-to-earn game. You may be liable to pay tax on this.

Will I be taxed even if I don’t sell my crypto?

Yes and No.

Suppose you buy crypto and then don’t sell it. Even if the value of your crypto goes up, you will not be taxed till you actually sell the crypto. So this may be good news for HODLers.

But if you get free crypto (from airdrops etc.) then you may have to pay gift tax on it even if you don’t sell it. See Answer 2 above for details on this.

How will crypto mining be taxed?

Crypto miners may have to pay a 30 percent tax on their profits. They may be allowed to claim a deduction of the “cost of acquisition” — electricity costs, depreciation on mining computers, etc. Further clarity on this is awaited.

How will crypto staking and lending be taxed?

Bitcoin year in review unsplash large

You may have to pay tax when you sell the crypto that you have earned from staking or lending. Further clarity on this is awaited.

Example: You have staked 100 ABC and received 5 ABC as a staking reward. You may not have to pay any tax. A few months later, you sell the 5 ABC for Rs. 10,000. Now, you may be liable to pay 30 percent tax on this Rs. 10,000 profit.

Will crypto exchanges deduct TDS?

For most transactions, crypto exchanges will have to deduct 1 percent TDS from July 1, 2022 onwards under the new section 194S of the Income Tax Act. This will ensure that all crypto transactions are recorded and reported to the government.

For the following people, this TDS may apply only if the total amount of crypto transactions is more than Rs. 50,000 in a year:

  • Individuals or Hindu undivided families (HUF) with total business sales/ gross receipts/ turnover of more than Rs. 1 crore a year.
  • Individual professionals with income over Rs. 50 lakh a year.
  • Individuals or HUF who do not have any income from business or profession.

For others, this TDS may apply if the total amount of crypto transactions is more than Rs. 10,000 in a year.

Will salaries paid in crypto be taxed?

Yes. Your crypto salary may be subject to a 30 percent tax. And since no deductions will be allowed, taking crypto salaries may not be a good idea anymore.

Do I have to pay tax even if I use a decentralised exchange (DEX) like Uniswap?

Bitcoin crypto market new jan unsplash large

A DEX like Uniswap will obviously not deduct any TDS. But you will still have to pay tax on your crypto profits. If you do not, then this is tax evasion carries heavy penalties when you get caught.

Do I have to pay tax even if I use a foreign crypto exchange like Binance?

Foreign crypto exchanges will not deduct any TDS. But you will still have to pay tax on your crypto profits. If you do not, then this is tax evasion and carries heavy penalties when you get caught.

Do I have to pay tax even if I use a peer-to-peer marketplace like LocalBitcoins?

Yes, you still have to pay tax on your crypto profits. If you do not, then this is tax evasion and carries heavy penalties when you get caught.

What if I gift crypto to a friend?

If it’s your friend’s wedding, then there is no gift tax payable. Otherwise, your friend may be liable to pay tax on these gifted cryptos. See Answer 2 above.


Rohas Nagpal is the author of the Future Money Playbook and Chief Blockchain Architect at the Wrapped Asset Project. He is also an amateur boxer and a retired hacker. You can follow him on LinkedIn.


Interested in cryptocurrency? We discuss all things crypto with WazirX CEO Nischal Shetty and WeekendInvesting founder Alok Jain on Orbital, the Gadgets 360 podcast. Orbital is available on Apple Podcasts, Google Podcasts, Spotify, Amazon Music and wherever you get your podcasts.

Cryptocurrency is an unregulated digital currency, not a legal tender and subject to market risks. The information provided in the article is not intended to be and does not constitute financial advice, trading advice or any other advice or recommendation of any sort offered or endorsed by NDTV. NDTV shall not be responsible for any loss arising from any investment based on any perceived recommendation, forecast or any other information contained in the article.


Source link

ANI-20211226024-0_1643702176587_1643702193540.jpg

‘Is cryptocurrency legal now?’ asks Congress as Centre imposes 30% tax on digital assets transfer

Finance minister Nirmala Sitharaman on Tuesday announced the Union Budget 2022-23, during which she declared that the central government is imposing a 30 per cent tax on virtual digital assets, bringing cryptocurrencies and non-fungible tokens (NFTs) under a tax net. Reacting to the announcement, Congress general secretary Randeep Singh Surjewala asked the finance minister to clarify whether cryptocurrency has been made legal now.

Also Read | ‘Crypto tax’ is here. India imposes 30% tax on proceeds of digital assets

Pointing out that the cryptocurrency-related bill has to first pass the Parliament before the government can consider imposing a tax on cryptocurrencies, the Congress leader asked Sitharaman to clarify three key questions regarding the Centre’s stance towards digital tokens –

1. What about cryptocurrency regulation/regulator(s)?

2. What about the regulation of cryptocurrency exchanges?

3. What about investor protection?

Taking to his official handle on Twitter, Surjewala posted, “And Ms. Finance Minister, pl do tell the Nation – Is Crypto Currency now legal, without bringing the Crypto Currency Bill, as you tax the crypto currency?”

Notably, finance minister Nirmala Sitharaman on Tuesday announced a 30 per cent tax on any income from the transfer of virtual digital assets, specifying that no deductions and exemptions will be allowed.

The gifts are to be taxed on the hands of the recipient, she said, adding that there will also be a 1 per cent tax deducted at source (TDS) on the payments made for the transfer of digital assets. It was also announced that any loss made on the transaction of such digital assets cannot be set off against any other gain.

In her Union Budget 2022 announcement, finance minister Nirmala Sitharaman also said that the country’s central bank, the Reserve Bank of India (RBI), will introduce a digital currency in the next financial year using blockchain and other supporting technology.

Also Read | ‘Nothing Budget’: Political reactions pour in after finance minister Nirmala Sitharaman’s speech

“Introduction of a central bank digital currency will give a big boost to the digital economy,” Nirmala Sitharaman said on Tuesday while presenting the federal budget. “Digital currency will also lead to a more efficient and cheaper currency management system.”

Earlier, India’s central bank had voiced “serious concerns” around private cryptocurrencies on the grounds that these may cause financial instability.

The introduction of the much-talked-about Cryptocurrency and Regulation of Official Digital Currency Bill was highly anticipated this year, but the government left it out of its agenda in the ongoing Budget session. However, speculation was rife regarding the central government’s official stance towards cryptocurrencies and any potential taxes that might be imposed on the same.




Source link