Will budget suck the life out of crypto trading?
Summary30% tax, 1% TDS and no provision for loss set-off and carry forward set to impact investors
Devanshu Khanna, who started trading in crypto assets in January, is worried that certain Budget proposals may put a big dent in his profits. A systems engineer by profession, Khanna trades through a bot on a global crypto platform. Crypto trading bots automatically execute fast-paced buying and selling orders based on a specific trading strategy. Khanna is confident that even with a 30% tax on crypto gains, he would be able to make a decent profit. “However, the 1% tax on every crypto transaction will eat into my profits," he fears. Many traders like Khanna are a worried lot today that the current Budget taxation proposals might make crypto investing unviable in India. The Budget 2022 has proposed that gains from virtual digital assets or crypto assets would attract a tax of flat 30% plus cess and surcharge where aggregate income is in excess of ₹50 lakh. Further, the government has introduced tax deducted at source (TDS) at the rate of 1% to trace the transaction trail and widen the tax base.