Govt to move amendments to Crypto tax rules today

Synopsis

Finance minister Nirmala Sitharaman will in all propose 39 changes to the Finance Bill, which will be taken up for consideration and passage in the Lok Sabha on Friday, an official privy to the development told ET.

The government has already notified the members of the house about the official amendments it proposes to make.The government will on Friday move amendments to the Finance Bill, including an explicit clarification that the loss on the sale of one virtual digital asset will not be allowed to set off against a gain made on another.

The provision is a setback for the crypto industry that was hoping for some relief from the amendments, after the government proposed a flat 30% tax on capital gains on virtual digital assets (VDAs). Another key amendment proposed is a provision to levy a penalty on taxpayers who have claimed a deduction of surcharge and cess from the taxable income but do not on their own pay the tax plus interest on the deduction so claimed.

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View Details »Finance minister Nirmala Sitharaman will in all propose 39 changes to the Finance Bill, which will be taken up for consideration and passage in the Lok Sabha on Friday, an official privy to the development told ET.

The government has already notified the members of the house about the official amendments it proposes to make.

The amendment to the crypto taxation regime is in line with a clarification given by minister of state for finance Pankaj Chaudhary on Monday, in response to a question in the lower house of Parliament. As per the official amendments to be moved, no other cost including the mining costs of the VDAs would be allowed to be set off against gains.

In her budget for fiscal 2023, Sitharaman has proposed a 30% tax on gains made from the transfer of any private virtual digital assets from April 1. She has also proposed a1% tax deducted at source on payments towards virtual currencies beyond Rs 10,000 a year, and taxation of such gifts in the hands of the recipient.

To ensure that all VDA transactions are liable to tax at the rate of 30% under Section 115BBH of the Act, a further amendment has been proposed in the section to provide that all modes of transfer are covered. This will bring to tax, for instance, transfers such as the exchange of one digital asset for another.
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Updated: 03/25/2022 — 21:00