CRYPTOCURRENCY EXCHANGES WILL BE REQUIRED TO PAY 1% TDS from July 1.

Cryptocurrency exchanges are officially preparing their systems for the one percent tax deducted at source that will begin next month, in a significant effort to bring cryptocurrencies and virtual assets under the tax scanner. The Union Budget for 2022-23 proposes a taxation structure for virtual digital assets that includes a 1% TDS on payments made in connection with their transfer.
The Bill proposes a new taxation mechanism for such virtual digital assets. The proposed section 115BBH proposes that, where an assessee’s total income includes any income from the transfer of any virtual digital asset, the income tax payable is the sum of the amount of income tax calculated at a rate of 30% on the income from the transfer of any virtual digital asset and the amount of income tax with which the assessee would have been charged shall be reduced from the total amount he/she earned by transferring such assets.

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