How cryptocurrency investors will be taxed from April 1

Income Tax Calculator: Starting April 1, 2022, many changes to income tax rules announced in the 2022 budget will be implemented across the country. The new tax law on cryptocurrency and other digital assets is one of them. According to Union Budget 2022, gain on digital assets including cryptocurrency like bitcoins will be taxed at 30% while there will be 1% TDS and gift tax under certain conditions to be paid by the recipient of the digital asset as a gift.

Speaking on the cryptocurrency tax in India implemented in the new financial year; Balwant Jain, a Mumbai-based tax and investment expert, said: “From April 1, 2022, all investors in digital assets will be required to pay a flat tax of 30% on their digital asset income. Apart from this, there will be 1% TDS to be deducted by the buyer of digital assets. 1% TDS will have to be deducted on the purchase value of the transaction. However, this TDS rule will become applicable from July 1, 2022 Apart from this, as of April 1, 2022, the definition of property has been changed to include digital assets Any gift including a digital asset received from an unspecified relative will be considered income if the total value of all gifts becomes greater than 50,000 in a single fiscal year.”

Balwant Jain said that from the following fiscal year, a taxpayer is advised to also include the gift amount of the digital assets when calculating the net amount of the gift accepted from unspecified relatives.

Echoing the views of Balwant Jain; Sujit Bangar, founder of, said: “The gain on the sale of cryptocurrency would be taxed at a tax rate of 30%. Only the deduction of the consideration for the sale may be the ‘cost of acquisition of cryptocurrency”. There will be no other expenses. Due to the lack of compensation for losses from other sources of income, it will become very difficult to have a profitable net trading of cryptocurrency. This taxation would certainly have an impact on after-tax reporting of cryptocurrency transactions.

On how TDS will be levied on digital assets such as cryptocurrency, bitcoins, etc., Sujit Bangar of explained, “TDS at the rate of 1% has been offered for transactions involving the An important point to note is that, we can sell cryptocurrency with profit or loss, but TDS at the rate of 1% would certainly occur, we can ask for the refund of TDS made on a transaction involving a loss . Therefore, it would be recommended to file a tax return if you have entered into transactions in cryptocurrency.”

To subscribe to Mint Bulletins

* Enter a valid email address

* Thank you for subscribing to our newsletter.

Download the app to get 14 days of unlimited access to Mint Premium absolutely free!

Esther L. Steinbach