Cryptocurrency Financial News

Taxing crypto assets will not provide any legality to their transactions, CBDT chief has said

In her Budget 2022 speech, finance minister Nirmala Sitharaman said the transfer of virtual digital assets would attract a 30 percent tax. This, by all means, refers to cryptocurrencies, even though India’s Cryptocurrency Bill has not been tabled or discussed in Parliament. For those who have been investing in cryptocurrencies, this may have come as a breather because the general feeling is that at least it won’t be banned now.

The global cryptocurrency market capitalisation dipped 4.04 percent over the last 24 hours to $1.70 trillion, while the trading volumes were up 7.54 percent to $68.72 billion.

Around 120,000 “wrapped ethereum” (WETH) tokens, valued at around $320 million, have been stolen from the Wormhole portal, which allows easy transfer of cryptocurrencies and non-fungible tokens (NFTs) between solana and ethereum blockchains.

Union Finance Minister  on February 1 said the Reserve Bank of India (RBI) will launch a central bank digital currency (CBDC) in 2022-23, marking the first official statement from the Union government on the launch of the much-awaited digital currency.

Devarsh Vakil, Deputy Head of Retail Research, HDFC Securities

cryptocurrency bill in Parliament. However, the government has smartly sidestepped on the legality of cryptocurrencies while showing its disinclination to support these, by levying a huge tax burden on those making money from such virtual digital assets, as the Finance Bill has tried to define it. The Finance Bill 2022 proposes to introduce a new phrase called virtual digital assets, which has a very wide definition encompassing all forms of digital assets including cryptocurrencies and non-fungible tokens. It has also added them to the expression “property”. Any transfer of virtual digital assets is proposed to be taxed at a higher rate of 30 per cent. Furthermore, no deductions would be allowed in computing the income arising from such assets, other than their cost of acquisition. More importantly, they have also proposed to tax the recipient of any such asset transferred without any consideration — for example, by way of a gift. It is also pertinent to note that any loss suffered from transfer of a virtual digital asset cannot be adjusted against any other source of income. The Central Board of Direct Taxes also plans to issue further guidelines concerning taxation of virtual digital assets, ironing out any leftover creases.

Mumbai: Tax on cryptocurrencies or virtual digital assets announced on Tuesday is set to create more problems for investors and their tax experts on how to compute gains and taxation. Many tax experts seem to have raised questions about what would happen to the gains made by investors in the past year. That is, whether the announcement on tax will be retrospective. «The concerned amendments are prospective from April 1, 2022. This means that for such transactions till March 31, 2022, taxation should be applicable at normal income tax slab rates or capital gains tax rates (as the case may be) and not the flat 30% rate,» said Sudhir Kapadia, national leader-tax at EY India.

Moscow has also set itself a new deadline on crypto regulation, claiming that it will broker a consensus on the matter “within the space of a month.”

“They are in a grey area. It’s not illegal to buy and sell crypto,” Finance Secretary T. V. Somanathan said in an interview to Bloomberg Television. “We have now put in a taxation framework that treats crypto assets the same way we treat winnings from horse races, or from bets and other speculative transactions.” After years of dilly-dallying on how to treat cryptocurrencies, the government’s budget Tuesday proposed taxing income from the transfer of virtual assets at 30 per cent — effectively removing any uncertainty about the legal status of such transactions.

Leading cryptocurrencies such as Bitcoin and Ethereum, as well as non-fungible tokens (NFT) will never become legal tender, Finance Secretary TV Somanathan said on February 2.

Income tax return forms from next year will have a separate column for making disclosures on gains made from cryptocurrencies and paying taxes, Revenue Secretary Tarun Bajaj said on Wednesday.

Income tax return forms from next year will have a separate column for cryptocurrency gains

The Budget announcement of taxing 'virtual digital assets' or crypto currencies will help the Income-Tax department measure the "depth" of this trade in the country, know the investors and the nature of their investments and it does not "attach any legality" to these transactions, CBDT Chairman J B Mohapatra said.

Bitcoin is set for another bull run and market frenzy when it goes through another halving, Thailand's largest digital-asset exchange Bitkub Capital Group Holdings has said.

Crypto regulation in India is still an ongoing debate, the country’s Finance Secretary T. V. Somanathan stressed, noting that, for now, cryptoassets are not illegal and are treated as gambling. 

Taxing crypto assets will not provide any legality to their transactions, CBDT chief has said

A once-ambitious but now faltering Facebook-backed digital currency project known as Diem is dead, its assets sold to bank holding company Silvergate Capital.

Barring the US dollar-pegged USD Coin, all of the other nine out of the top-10 digital tokens were trading higher during the trade. Terra and Solana zoomed up to 7 per cent, followed by Ethereum which posted decent gains. The global crypto market cap added more than a per cent to $1.78 trillion. However, the total crypto market volume dipped almost 3 per cent to $65.48 billion.

"They are in a grey area. Its not illegal to buy and sell crypto," Finance Secretary TV Somanathan said.

Lebanon allegedly plans to forcibly convert foreign currency holdings to its floundering pound (LBP), once again building a case for Bitcoin (BTC).