Important News: ICAI working on research paper on cryptocurrency

ICAI, the apex body of chartered accountants, will prepare a research paper on cryptocurrencies covering various aspects including the meaning of taxation. ICAI President Debashish Mitra said on Tuesday that the institute is working on a research paper on cryptocurrencies, which is expected to be ready in a month and a half. Currently, cryptocurrencies are unregulated in the country. Mitra said that after the completion of the research paper, it will be handed over to the government.

When asked about cryptocurrency, Mitra said, “We are aware of the matter. The Union Budget 2022-23 has brought clarity regarding the imposition of income tax on crypto assets. With effect from April 1, 30 per cent income tax plus cess and surcharge will be levied on such transactions in the same manner as it treats winnings from horse racing or other speculative transactions.

In addition, the budget proposes 1 per cent TDS on payment of virtual currencies in excess of Rs 10,000 in a year and taxation on such gifts at the hands of the recipient. The TDS limit will be Rs 50,000 per annum for specified individuals, which includes individuals/HUFs who are required to get their accounts audited under the I-T Act.

Explain that only the digital rupee proposed by RBI will be considered as a digital currency, the rest will be kept in the category of digital asset. Along with this, it is also important to know that RBI’s proposed digital currency will be used only between two merchants or it can also be used for retail, RBI will decide on it.

It is noteworthy that several finance ministers had announced in their budget speech that RBI would launch a block chain based digital currency in the next financial year. RBI and Ministry of Finance are working in perfect harmony on everything except crypto.