Government may
consider levying tds tcs
on cryptocurrency
trading.
The government could contemplate imposing TDS/TCS on the sale and purchase of cryptocurrencies above a certain threshold, and such transactions should be brought under the purview of specified transactions for the purpose of reporting to the income tax authorities.
Aravia Srivatsan, the tax leader at Nangia Andersen LLP, says that bringing cryptocurrencies under the provisions of tax deducted at source (TDS) and tax collected at source (TCS) above a threshold limit will help the government get the “footprints of the investors” in light of the size of the market, the amount involved, and the risk associated with cryptocurrencies.
Similarly to profits from the lottery, game shows, puzzles, etc., income from the sale of cryptocurrencies should be taxed at a higher rate of 30%, he added.
Currently, India has the highest number of crypto proprietors in the world, at 10.07 crore, and a report predicts that by 2030, Indians will have invested $241 million in cryptocurrencies.
“During the Winter Session of Parliament, a measure to regulate cryptocurrencies was anticipated. However, it was not introduced, and it is now anticipated that this measure will be considered during the Budget Session.
If the government does not prohibit Indians from trading cryptocurrencies, we anticipate that it will implement a regressive tax system for cryptocurrencies“He observed.
What is tds and tcs?
TDS stands for Tax Deducted at Source, which is a mechanism for collecting income tax in India, at the time of generating income. TDS is deducted from the payment made or credited to the payee, and the deductor is required to deposit the TDS with the government. The payee can claim a credit for the TDS deducted while filing their income tax return.
TCS stands for Tax Collected at Source, which is a tax collected by the seller from the buyer at the time of sale of certain specified goods, such as scrap, minerals, and forest products. TCS is collected as a percentage of the sale price, and the seller is required to deposit the TCS with the government. The buyer can claim a credit for the TCS paid while filing their income tax return.
TDS and TCS on
Cryptocurrency?
TDS and TCS are terms used in the Indian tax system to collect income tax and other taxes. TDS stands for Tax Deducted at Source, which is the amount of tax collected by the buyer from the seller at the time of payment or credit of the amount exceeding certain limits. TDS on cryptocurrency transactions came into effect in India on July 1, 2022, requiring the buyer of a virtual asset to deduct 1% of the amount paid to the seller, and it applies to transactions more than Rs 10,000. TCS, on the other hand, stands for Tax Collected at Source, which is the tax collected by the seller from the buyer at the time of sale of certain specified goods. In the case of cryptocurrency, the Indian government could consider levying TCS on the sale and purchase of cryptocurrencies above a certain threshold, and such transactions should be reported to the income tax authorities. The deductor or seller is required to deposit the TDS or TCS with the government, and the payee or buyer can claim a credit for the amount paid while filing their income tax return.
Goverment on
cryptocurrency.
TDS stands for Tax Deducted at Source and TCS stands for Tax Collected at Source. The Indian government has recently implemented TDS on cryptocurrency transactions, requiring the buyer to deduct 1% of the amount paid to the seller for transactions over Rs 10,000. This came into effect on July 1, 2022. The Indian government is also considering levying TCS on the sale and purchase of cryptocurrencies above a certain threshold to bring more transparency and accountability to the market. The deductor or seller is required to deposit the TDS or TCS with the government, while the payee or buyer can claim a credit for the amount paid while filing their income tax return. The income from cryptocurrency sales could also have a higher tax rate of 30%.
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