30 percent tax has been announced on income from other virtual digital assets (VDA) including cryptocurrency and NFT in budget 2022. In such a situation, the biggest question in many crypto investors and traders is that how to avoid flat 30% tax on income from cryptocarency? The new crypto tax rule will be implemented from the assessment year 2023-2024. This means that in the financial year 2022-23, the crypto will be taxed at the rate of 30% (as well as satisfaction) on your income.
How to Avoid Flat 30% Tax on Crypto?
In the current financial year (up to 31 March 2022) 30% tax rule will not be applicable on crypto income. Therefore, if you sell your crypto holdings till March 31 and book the profit, then the assessment on this income will be taxed according to the current rules in the year 2022-2023.
Tax rules on crypto income by 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