If you are an investor of Cryptocurrency, you should be ready to pay the income tax on the gains. Yes, now with effect from 01 April 2022, you will have to pay Income tax on the investments on your digital assets. The users of cryptocurrency need to pay the income tax on gains that implied from virtual assets. The Nonfungible tokens and the NFTs and different digital assets. However, TDS will even be applicable on various transactions that involve around Cryptocurrency and all the digital assets.
Understanding about Tax Implication on Cryptocurrency
Also, the losses that incurred from one kind of the virtual digital assets might not get set off against any kind of gains from the transaction. It involves any kind of the digital tokens. Even, income from sale of digital assets like the NFT and Cryptocurrency will also get tax at the flat rate of almost 30 per cent
Even there will be not any such deduction for the expenses that incurred on the cryptocurrency transactions. It is apart from the cost of attaining these assets. The Loss that incurred from cryptocurrency and other virtual assets will not get set-off against other income. Here, other income means the gains from mutual funds and shares of the taxpayer. Thus, all the loss transactions are ignoring for the purpose of tax calculation and simply profit gets calculate.
The Loss arising from different digital asset may not carried ahead to next year. As an addition, the payment of proceeds to the taxpayer from sale of various virtual assets will definitely attract some TDS on the transactions in a year.
Hereby, gifting of the cryptocurrency and NFTs will be taxable for recipient. As per the latest law of income tax, there will be some tax liability. It should mentioned that the loss of virtual assets may get settle against the loss of digital assets.