Income Tax Return for AY 2022-2023: In the Budget 2022, 30 percent tax has been announced on the income from Cryptocurrency and other Virtual Digital Assets (VDA) including NFT. In such a situation, the biggest question in the mind of many crypto investors and traders is how to avoid flat 30% tax on income from cryptocurrencies? The new crypto tax rules will be applicable from assessment year 2023-2024. This means that your income from crypto will be taxed at the rate of 30% (plus cess and surcharge) in the financial year 2022-23.
How to Avoid Flat 30% Tax on Cryptos?
In the current financial year (till 31st March 2022) the tax rule of 30% will not be applicable on crypto income. So if you sell your crypto holdings and book profit by 31st March, then this income will be taxed in the assessment year 2022-2023 as per the extant rules.
Tax rules on crypto income till March 31, 2022
According to Revenue Secretary Tarun Bajaj, crypto investors can show their income under certain items in the ITR and the Assessing Officer will assess the transactions before April 1. Bajaj recently quoted news agency PTI as saying, “You will show the transactions before April 1 in your ITR and the assessing officer will do the assessment for you.” Bajaj further said, “Assessing Officer will decide on which crypto gain should be charged.”
The amount of tax that will have to be paid on crypto income before March 31 will vary on a case-by-case basis, but it is clear that investors will not have to pay a flat 30% tax. This can be especially beneficial for small crypto investors who want to book profits and avoid flat 30% tax.
From July 2022, 1% TDS rule will also be applicable on crypto transfers. This will make it easier for the tax department to track crypto transactions. Budget 2022 proposes to introduce section 115BBH, according to which, income from transfer of any virtual digital assets will be taxed at the rate of 30% and losses arising from cryptocurrency will not be set off or carried forward Can go
