Cryptocurrencies could attract tax rates similar to lottery, TDS provisions

New Delhi, Jan 17 If the government does not prohibit Ind from dealing in cryptocurrencies, it could introduce a regressive tax regime for cryptocurrencies, according to Taxmann.

Taxmann said in a note that a Bill was expected to be presented during the Winter Session of Parliament to regulate cryptocurrencies. However, it was not introduced, and it is now expected that the government may take up this Bill in the upcoming Budget Session.

Considering the size of the market, the amount involved, and the risk coupled with cryptocurrencies, some changes may be brought in the taxation of cryptocurrencies in the Union Budget 2022-23, Taxmann said.

Among the TDS/TCS provisions, both sale and purchase of cryptocurrencies above the threshold limit should be brought within the ambit of TDS/TCS provisions. This will help the government get the footprints of the investors, Taxmann said.

It could lead to reporting in Statement of Financial Transactions

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