Rajkotupdates.news: Government May Consider Levying TDS TCS On Cryptocurrency Trading
Buying and selling cryptocurrency is among the most lucrative opportunity you can take advantage of in India. It entails an investor or trader entering or exiting a position in security, such as currency, bond, or stock. That explains why it enjoys immense popularity in the country and worldwide at large.
But the growth of cryptocurrency trading doesn’t only attract investors’ and traders’ attention. In the upcoming Union Budget, the Indian Government plans to impose Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) on the sale and purchase of crypto over a specific threshold.
If you are among the first to check out Rajkotupdates.news: Government May Consider Levying TDS TCS On Cryptocurrency Trading update, you can agree this decision is already sparking mixed reactions among crypto enthusiasts.
Still on the fence regarding how this new development will impact crypto trading in the country? Fret not, since this quick guide takes you through the possible tax implications of trading crypto. Read on to uncover more!
What Are Cryptocurrencies?
Before delving deeper into Rajkotupdates.news: Government May Consider Levying TDS TCS On Cryptocurrency Trading updates, it pays off to understand what we’re dealing with in the first place. In a nutshell, cryptocurrency is merely a digital payment system that is void of banks to verify transactions.
Among the most popular cryptocurrency types worth trying include Ethereum, Bitcoin, Dai, Binance Coin (BNB), and Tether, to name a few. These virtual tokens run on the blockchain, a distributed public ledger.
The good thing about cryptocurrency is that it allows for cost-effective transactions, decentralization, accessibility, and diversity. But it also has its downsides considering it is easily subject to security issues, price instability, and regulatory uncertainty.
Understanding the Difference between TDS and TCS
Now that Rajkotupdates.news: Government May Consider Levying TDS TCS on Cryptocurrency Trading is now upon us, it is common to wonder what these taxes entail. As a reminder, Tax Deducted at the Source (TDS) is a tax deduction on company payments to an individual, as long as it exceeds a specific limit. TDS applies to payments, such as rent, brokerage, professional fees, and rent.
On the other hand, Tax Collected at Source (TCS) is collected by sellers when they sell something to buyers. It applies to sales made from goods, including mineral wood, scrap, timber, etc.
Taxation Process for Crypto Trading in India
With the growing popularity of crypto trading, the Indian government is making clear the regulations governing its management and taxation. Well, Rajkotupdates.news: Government May Consider Levying TDS and TCS on Cryptocurrency Trading headline reveals such a regulation. To avoid making do with fines or legal costs, it’s in your best interest as a taxpayer to precisely file your tax returns and follow all applicable TDS and TCS requirements.
The levying of TDS and TCS on cryptocurrency trading aims to allow for more accountability and transparency in the market. Moreover, this decision stands to help the government effectively track cryptocurrency transactions and maximize its collection.
Revealing the news, Aravind Srivatsan, Tax Leader and Partner, Nangia Andersen LLP said new changes would apply on the sale or purchase of crypto exceeding a certain threshold. Such transactions should be within the ambit of specified transactions for the sole reason of reporting to income tax authorities.
It doesn’t end at that since the new changes propose a higher tax rate of 30% on income investors and traders earn from cryptocurrency sales, similar to profit from puzzles, lotteries, game shows, and many more.
Implications of TDS and TCS on Cryptocurrency Trading
While Rajkotupdates.news: Government May Consider Levying TDS TCS On Cryptocurrency Trading update is a shocker to most wanna-be crypto traders and investors in India, it is vital to prepare yourself adequately for what lies ahead. And among the best way to go about this is by understanding the implications of TDS and TCS on cryptocurrency trading.
The levying of TDS and TCS on cryptocurrency trading goes a long way in helping the government track and collect taxes on crypto transactions. Moreover, it puts virtual coins under the view of tax authorities. You might wonder what makes this essential for the Indian Government. It allows for better scrutiny of crypto transactions and increases the market’s regulation.
There is a lot more to imposing TDS and TCS taxes on cryptocurrency trading, as investors will also feel the heat of the new changes since it could impact the profitability of their investments, After all, crypto investors now have to take up the additional tax liabilities.
It doesn’t end with that since cryptocurrency traders and investors in the country should be ready to make do with additional compliance requirements and regulatory hurdles. The new compliance and regulations will affect the ease of making crypto investments.
On the brighter side, the levying of TDS and TCS on cryptocurrency trading has the potential to change the crypto trading market immensely. After all, it allows for greater clarity and structure to the taxation of virtual tokens. That way, you won’t have to go through a lot merely because you want to understand tax liabilities better.
The Bottom Line
Rajkotupdates.news: Government May Consider Levying TDS TCS On Cryptocurrency Trading report is undeniably a shocker to most investors and traders in the country. But there is no way around it if it comes to pass, considering it also aims to shape the cryptocurrency market for the better.
If what we know until now is anything to go with, the government will levy TDS and TCS taxes on regular profits and capital gains. With TDS, the payer undertakes the responsibility of withholding tax, while initiating a cryptocurrency transaction. As for the TCS, a crypto seller collects this income tax at the point of sale when applicable.
Be sure to acquaint yourself with the implications of TDS and TDC taxes to avoid leaving the door for mistakes wide open. After all, skimping on these taxes could leave you facing fines and legal penalties.