ITR filing: Key things to know while filing income tax return on crypto gains
The deadline for filing ITR for FY 2022-23 is July 31, 2023. It is important for taxpayers to understand the rules and implications of crypto taxation
Filing ITR on crypto gains: The Union government imposed a 30% tax on crypto profits in Union Budget 2022. A 1% TDS on sales was also introduced. The new Income Tax Return (ITR) forms for the financial year 2022-23 now have a dedicated section called Schedule - Virtual Digital Assets (VDA) for reporting gains from crypto/NFTs and other VDAs. The last date for filing an income tax return (ITR) for FY 2022-23 is 31st July 2023.
It is crucial to know the taxation rules, and understand the implications for cryptocurrencies and virtual digital assets (VDAs) when filing your ITR.
How is cryptocurrency taxed in India?
ITR on crypto gains
The crypto tax applies to all investors, whether private or commercial, who transfer digital assets during the year.
Cryptocurrency transactions, including purchases, sales, and transfers, are subject to a 30% capital gains tax. Along with that, a 1% Tax Deducted at Source (TDS) fee is applied to crypto asset transfers.
“For any transaction exceeding ₹50,000 in a given financial year, the TDS that is deducted will be reflected in 26 AS and the same can be claimed back when filing income tax return,” said Edul Patel, CEO and Co-founder of Mudrex, a global crypto-investing platform.
The tax rate is the same for short-term and long-term gains, and it applies to all types of income earned by the investor.
When filing your ITR, accurately report all cryptocurrency earnings, such as trading profits, mining income, staking rewards, wallet transfers, gifts, and airdrops. Maintain detailed transaction records and consider using crypto tax calculators or seeking professional assistance, added Edul.
ITR filing crosses 2 crore
Meanwhile, more than 2 crore Income Tax Returns (ITRs) for AY2023-24 were successfully filed till 11 July. This time, the milestone mark was achieved by the IT department nine days earlier than the previous year.
“We are happy to inform you that over 2 crore Income Tax Returns (ITRs) for AY 2023-24 have already been filed till 11th of July this year as compared to 2 crore ITRs filed till 20th of July last year. Our taxpayers have helped us reach the 2 crore milestone 9 days early this year, compared to the corresponding period in the preceding year, and we appreciate the effort," informed the Income Tax department in a tweet from its official account.
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First Published:17 Jul 2023, 10:16 AM IST
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