Tax experts are seeking clarity regarding cryptocurrency earning in the Union Budget 2022. As per the tax experts, there is no specific provision in the income tax law for computation of earnings. They expect a proper tax policy frame work for cryptocurrency taxation in the upcoming budget to be held on 1st February, 2022.
In this regard, Abhishek Soni, Co-founder and CEO, Tax2win, told FE Online, “As per general provisions, it is taxed under the Capital gain head. However, as per the opinion of a few professionals, it is to be taxed under the head of other sources of income since no specific head is defined. In some cases, where the volume of transactions is high, it may be treated as a business income also. Therefore, there is no clarity on the taxation of cryptocurrency, so it is expected from this budget to bring specific provisions for cryptocurrency taxation.”
According to Archit Gupta, Founder and CEO, Clear, “There are various concerns about the taxation of crypto, its classification, applicable tax rates, TDS/TCS and GST implications on the sale and purchase of cryptocurrencies, etc. which we are hoping will be clarified during the budget session.”
Further, Deloitte India has pointed out issues resulting in uncertainty due to absence of specific provisions over cryptocurrency in Indian. It has recommended in its pre-budget expectations, that a specialised regime for taxation of cryptocurrency be introduced covering, interalia, provisions dealing with classification of cryptocurrencies (capital asset vs. financial instrument vs. commodity), situations in which cryptocurrencies are taxable in India, head of income for taxation, expenses that can be claimed, income tax rate, and reporting requirements.
Earlier Crypto Exchanges had sought more clarity over crypto assets from government. However, it is reported recently, that the government is likely not to introduce bill over cryptocurrency in the upcoming budget session.