Bhoomika Singh
The Direct tax collected by way of tax deducted at source under section 194S of the Income-tax Act, 1961, on payments made upon transfer of Virtual Digital Assets (VDA), aggregates to Rs. 157.9 crore upto March 20th 2023 for FY 2022-23. This was stated by Union Minister of State for Finance Pankaj Chaudhary in a written reply to a question in Rajya Sabha on Tuesday.
The Minister stated that Crypto assets are currently unregulated in the country, however, transactions in cryptocurrencies are subjected to provisions of various laws like the Prevention of Money Laundering Act, 2002 and Income-Tax Act, 1961.
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Chaudhary further stated that the Financial Stability Board states in its Consultative Document titled “Regulation, Supervision and Oversight of Crypto-Asset Activities and Markets,” dated October 11, 2022, that investment and activity in the crypto-asset market are largely self-contained and are mostly for speculative purposes with limited connections to the real economy.
Recently, Indian government recently included cryptocurrency in the Prevention of Money Laundering Act (PMLA), stating that the regulations are necessary to prevent money laundering and other criminal activities, and that its users’ privacy will be protected.
Announced in the budget the last year, for 2022-23, transactions involving cryptocurrencies or VDAs would be subject to a 30 per cent tax and a 1 per cent tax deducted at source (TDS). Following that, the Central Board of Direct Taxes (CBDT) has issued detailed disclosure requirements for TDS deductions for VDAs, including the date of transfer and mode of payment.
TDS of 1 per cent will be levied on payments to VDAs or cryptocurrencies exceeding Rs 10,000 per year beginning July 1, as Section 194S of the I-T Act was added by the Finance Act of 2022.
