Crypto Miners To Pay Flat 30% Tax: Indian Govt

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After imposing a 30% tax on Cryptocurrency earnings, the Indian government dropped another shocker for the investors. Answering the queries, the Ministry of Finance clarified that loss incurred from trading in one type of crypto token cannot be set off from the profit of another coin. Ministry also elucidates cost of building mining infrastructure won’t be eligible to be deducted as the cost of acquisition.

Can’t set-off loss from one crypto with another

India is still in between in the massive adoption of Cryptocurrency. However, Youngsters have been a major proportion of this evolution. Meanwhile, the Indian government is taking one step at a time to protect investors from fraud and illegal activities. Indian Finance Ministry has replied to all queries related to doubts over Cryptocurrency raised by the opposition during the parliament session.

Pankaj Chaudhary, Minister of State for Finance notified that ‘Currently, Cryptocurrencies are unregulated in India.’

Can losses incur in one virtual digital asset can be set off against the gains arising from another virtual digital asset?

The minister replied, As per the provisions of the proposed section 115BBH to the Income-tax Act, 1961 (the Act), loss from the transfer of virtual digital asset (VDA) will not be allowed to be set off against the income arising from transfer of another VDA.

To the query, Whether infrastructure costs incurred in mining digital assets are to be treated as a cost of acquisition?

As per the proposed section, any income from transfer of VDA shall be taxed at the rate of 30%. Further, while computing the income from transfer of VDA, no deduction in respect of any expenditure (other than cost of acquisition) or allowance is allowed.

As per the proposed provisions of section 115BBH, infrastructure costs incurred in mining of VDA (eg. crypto assets) will not be treated as cost of acquisition as the same will be in the nature of capital expenditure which is not allowable as a deduction as per the provisions of the Act, he added

Ashish believes in Decentralisation and has a keen interest in evolving Blockchain technology, Cryptocurrency ecosystem, and NFTs. He aims to create awareness around the growing Crypto industry through his writings and analysis. When he is not writing, he is playing video games, watching some thriller movie, or is out for some outdoor sports. Reach me at [email protected]
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.

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