Income tax tweak that cryptocurrency investors must know during ITR filing

Income tax rules for virtual asset investors have changed from today. According to new income rules from April 2022, an investor in cryptocurrency must pay 30 percent fixed income tax on his income on his investment. However, there is a catch in this income tax rule. In the new income tax rule for 2022 regarding Virtual Digital Asset (VDA), the loss in a virtual asset will not be set off against a gain in another virtual asset. So the new income tax rule that is levied on virtual assets from today indicates that all loss transactions will be ignored for tax calculation and only profit will be calculated.

Talks about the income tax department’s tweak while levying taxes on cryptocurrencies and other virtual assets; Kunal Jagdale, founder of BitsAir Exchange, said, “The government has clarified the tax policy for individuals. Indian investors cannot offset the losses that result from a cryptocurrency exchange against the profits of others. This means that even if you make a loss on an asset, you have to pay. tax on the profits of others. “

Explain what this income tax rule means for an investor in cryptocurrency as of today; Manoj Dalmia, founder of the Proaasetz Stock Exchange, said, “Since the new fiscal year begins on April 1, 2022, there will be a new bill on virtual cryptocurrencies. According to the bill, a specific tax regime for Virtual Digital Asset (VDA) must be followed.” The loss in one VDA will not be offset against the profit in another VDA. Therefore, all loss transactions will be ignored for tax purposes and only profits will be calculated. All trading pairs whether fiat to crypto or crypto to “Crypto will be a taxable event. Apart from holding and trading, even gifts by VDA will be taxed in the hands of the recipients.”

This tax slip even covers miners as no expenses for starting mining operations are allowed as a deduction. Therefore, the mining transaction cost for the purchase will be zero. What can be offset is only the cost of acquisition / purchase at VDA.

So a cryptocurrency investor must understand that only profits will be taxed at 30 percent without offsetting losses and other costs if mining is included. The only cost of acquisition / purchase at VDA will be considered.

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