Budget In The Time Of Cryptocurrency: The What Ifs Explained

Union Budget 2022: If Indians are not barred from dealing in cryptocurrencies, the government may impose a tax on them

Over the last few years, India's cryptocurrency sector has grown at an exponential rate. There is currently no law in the country that supervises or regulates cryptocurrency trading. Buying, selling, or trading digital coins, as well as establishing a cryptocurrency exchange, are all legal in India.

Given the risks associated with cryptocurrency trading, there was speculation that a bill would be introduced in the Winter Session of parliament, which would either ban or regulate digital assets. That bill, however, was not introduced. The government is now likely to introduce the crypto bill in the Budget session, which starts on January 31 and ends on April 8.

If Indians are not barred from dealing in cryptocurrencies, the government may impose a tax on them. The government may contemplate levying TDS (tax deducted at source) and TCS (tax collected at source) on the sale and purchase of cryptocurrencies beyond a specific threshold. In case that happens, it will help the government know and track the investors.

Buying and selling cryptocurrency could be included under the ambit of reporting in the Statement of Financial Transactions (SFT) like trading companies usually report the sale and purchase of shares and mutual fund units.