India’s Finance Minister Nirmala Sitharaman has recently made important statements about tax provisions on cryptocurrency and digital assets. Although Cryptocurrency Has not yet been legally recognized in India, the government has taken a step to implement tax on virtual assets, which has started a lot of discussion on it. This statement of the Finance Minister attracted attention to Crypto and Financial Space, in which he spoke of access to digital records to prevent tax evasion and fraud.
Finance Minister’s statement on Crypto Taxation
Nirmala Sitharaman made it clear that the government felt the need to bring it under tax in view of the increasing use of cryptocurrency. He said that the use of cryptocurrency is increasing not only for investment, but also in tax evasion and Eligel Financial Activity. To deal with this, the government applied 1% TDS (Tax deducted at Supply), which is effective from 1 July 2022. This tax applies to all cryptocurrency transactions that trade more than Rs 50,000.
Sitharaman reported that 30% tax is also applicable on cryptocurrency, which apply to those who receive benefits from Crypto. However, he also clarified that this step is not aimed at making cryptocurrency completely legal, but to control and track it. According to him, this step will prevent tax evasion and transparency will bring transparency in financial space.
However, this was the first time that any positive news has come out by the Government of India about cryptocurrency. Earlier from the government associated institutions Crypto prevent The statements related to it were revealed.
Need to access TDS and digital data
Finance Minister also said that tax officials need to reach digital records so that they can better check tax evasion and fraud. He gave an example, in which tax authorities revealed illegal crypto transactions of ₹ 90 crore through WhatsApp messages. He informed that due to the access of digital records, it will be possible to identify such cases and this will control financial crimes.
Sitharaman said that books and laser were tested in earlier times, but now it has become very important to track digital transactions. Tax thieves often show their laser, but actually they can hide important information in mobile data and encrypted messages. Under the new law, the authorities will get access to this data, so that they will be able to investigate properly and take action on tax thieves.
Conclusion
Cryptocurrency in India has not yet been completely legal, but these new tax provisions of the government have taken an important step in this direction. Nirmala Sitharaman’s statement shows that the government is preparing a strong framework to control the trading of cryptocurrency. Steps such as 1% TDS and 30% tax indicate that the government is serious about monitoring digital assets and increasing control.
However, the question still remains as to what will be the legal status of cryptocurrency, but at the moment it is clear from the government’s steps that it is working towards organizing the region. In the coming time, it will be interesting to see what more steps the government takes in this field.
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