If you are a cryptocurrency investor then beware as new tax rules are going to be in effect on 1st April 2022. The rules were already mentioned in the Union Budget 2022 and are now applicable from the beginning of the financial year. Learn here what will get changed.
Tax Rules For Crypto Users
- As per section 115BBH of the new bill, any loss incurred during the trading of crypto assets will not be set off.
- The amendment is done in the new law that states one cannot set off the loss on crypto assets against gains from the same
- A 30 percent of tax will be levied on all the transactions related to crypto
- If any payment is done in virtual currencies then one percent of TDS will be deducted on it. However, this rule is applicable only if the transaction amount if more than Rs 10,000 per year. It also includes taxation on gifts received via crypto.
- As per new crypto tax rules, there will be a threshold limit for TDS which would not exceed Rs 50,000 annually. This limit also covers individuals and HUFs accounts.
- Implementation of TDS rule will not be applicable from 1st April instead it will come into effect after 2 months. However, taxation on gains is applicable from April month.
- A VDA will cover both cryptocurrencies and NFTs
- Mining costs of VDA (virtual digital assets) will be treated as capital expenditure and thus does not come under the deduction rule of IT Act.
Also Read: Union Budget 2022 Focuses More On Crypto, From Crypto Tax to Digital Rupee Here’s What Discussed
What’s Changing For Taxpayers?
Beside crypto tax, new rules also include changes for PF account, IT return, covid treatment, mutual funds, and government service employees. Here is how these will be affected:
For PF Account Holders
Interest earned on the PF contributions of more than Rs 2.5 Lakh/year will be taxable
For IT Returns
You will be able to file updated IT returns in the new financial year. If you have made any mistake while filing the return for the first time, then you can correct it and file the return for the second time. Please note that updated IT returns can be filed up to 2 years after the assessment year.
For Government Employees
State government employees can claim a deduction for NPS contributions up to 14% of their basic salary and dearness allowance as per section 80CCD (2). This will be equal to the deduction available to Central Government employees.
For Covid Treatment
Tax exemption has been given on the money received for the treatment of corona. After the death of a person from Corona, the money received by his family has also been kept out of the purview of tax. For this, it is necessary that the money is received within 12 months of death due to Covid and the amount received should not exceed 10 lakhs.