The Central Board of Direct Taxes (CBDT) will release a list of frequently asked questions (FAQ) on cryptocurrency tax before July 1. During an event hosted by the Income Tax Department as part of the Ministry of Finance’s ‘Iconic Week Celebrations,’ CBDT chairperson Sangeeta Singh said, “We are working on the FAQs for clarity on cryptos, and we will release it before July 1.” While cryptocurrencies are still unregulated in India, gains from crypto assets face a tax of 30 percent.
Cryptocurrencies are clubbed under virtual digital assets (VDAs) in India. As part of the new tax regime that went into effect on April 1, any income from VDA transactions will face a tax of 30 percent. A TDS of 1 percent is also applied on top of that. It will come into effect starting July 1.
Ministry of Finance officials will also keep a watchful eye on crypto exchanges in the country. As reported by Mint, a senior ministry official said, “Our officers will keep a close eye on the cryptocurrency exchanges which are around 40 in number where transactions in major coins like Bitcoin, Ethereum are going on.”
The ministry will also keep a watch on crypto transactions through reporting businesses, the official added.
In May, it was reported that cryptos and all related services may face an additional GST of 28 percent. The GST Council is expected to consider the proposal in a future meeting. However, there hasn’t been any official announcement since then.