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.
Presented ByDid you Know?
Sunny Leone took the lead among Indian actors to secure her digital assets when she broke the news about her association with NFT, two months back. This made her the first Indian actress to mint NFTs
View Details »Also, what would happen to the losses made by the investors in the earlier years—can that be carried forward? The government has said that losses cannot be set off—but if the tax law is not retrospective, losses from the past can technically be carried forward, say tax experts. «The contentious issue, however, is the unadjusted carried forward losses. Whilst the tax department may like to contend that such a loss cannot be set off from 1 April 2022 (AY 2023-24) onwards, there can be an alternative argument that such a loss, having already crystallised before this amendment being made effective, should not be impacted by these changes and allowed to be carried forward and set off as per normal provisions,» said Kapadia. There could also be an issue with how exactly the tax is computed from April to April, say tax
Read more on economictimes.indiatimes.com