Cryptocurrency Tax to be levied on transactions of current fiscal 2021-22: CBDT Chairman

As the Union Budget 2022 introduced heavy taxation on the income generated through digital assets, including Cryptocurrency, the worries of the Crypto investors have been further mounted as the government is deliberating on imposing a retrospective tax on the same for the ongoing fiscal.

The Chairman of the Central Board of Direct Taxes (CBDT), JB Mohapatra on Thursday noted that the cryptocurrency-related transactions done in the current fiscal 2021-2022 will also be taxed. Ironing out the doubts on the taxation of the digital assets, he clarified that the Crypto investors will be taxed for the transactions done before April 2022 and they will not be considered out of the purview of taxation.

Crypto tax to levy on transactions before April 2022 

“The taxability of the crypto-currency is certain for this financial year too. Crypto investors should know that the transactions done before April 2022 will not be tax-free,” Mohapatra told ANI.

Further speaking on recording the highest GST tax collection in January 2022, the CBDT Chairman asserted that the Income tax collection target for 2021-22 will be exceeded. He informed that the previously set direct Tax collection target for the current fiscal was Rs.11.08 lakh crore, which has now been revised and upscaled at Rs. 12.50 lakh crores. Further continuing on the same, he exuded confidence in reaching the revised figures. The government has already collected Rs. 10.43 lakh crore revenue so far.

“We will exceed the direct tax collection target of Rs 11.08 lakh crores set for the financial year 2021-22. We have collected Rs 10.43 lakh crores so far. Revised estimate numbers of Rs 12.50 lakh crores have also been given to us now. We are confident of reaching the target of 12.50 lakh crores,” CBDT Chairman stated.

In a jolt to the Crypto traders who were trading in digital assets beyond the sight of the government, the Union government placed the digital assets under massive taxation of 30% on February 1. While presenting the Union Budget 2022 in the Parliament, Finance Minister Nirmala Sitharaman announced on February 1 that the Centre would impose a 30% tax on cryptocurrencies, and she also introduced the digital currency to be issued by the Reserve Bank of India (RBI). 

No legalisation for Bitcoin, Etherium or NFTs

Clearing the air around the Centre's stance on cryptocurrencies, Nirmala Sitharaman, in her latest statement on February 2, has clarified that cryptocurrencies such as Bitcoin, Ethereum and Non-fungible tokens (NFTs) will never become legal tender. She said that for any currency to be considered a legal tender, it must be issued by the RBI, even if it is a cryptocurrency. It is worth noting that the Centre is repeatedly calling these cryptocurrencies "digital assets", which makes them taxable. 

Talking about the Digital Rupee, the Finance Minister had said, "Digital rupee to be issued using blockchain and other technologies; to be issued by RBI starting 2022-23. This will give a big boost to the economy."

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