The government is coming up with a definition of virtual digital assets (VDA) with a view to levying a 30% tax on income from the transfer of such assets, Chaudhary told the Lok Sabha in a written reply.
Infrastructure costs incurred in mining virtual digital assets, such as cryptocurrencies, are not allowed as a deduction under the Income Tax Act, Finance Minister Pankaj Chaudhary told parliament on Monday.
The government is coming up with a definition of virtual digital assets (VDA) with a view to levying a 30% tax on income from the transfer of such assets, Chaudhary told the Lok Sabha in a written reply.
The FY23 budget clarified the income tax levied on virtual digital assets. As of April 1, 30% tax plus applicable taxes and fees will be levied on profits from such transactions in the same way as profits from horse racing or other speculative transactions.
The minister said that when calculating the income from the transfer of VDA, no deduction of expenses (other than the acquisition costs) or fees is allowed.
“Infrastructure costs incurred in mining VDA will not be treated as acquisition costs as the same will be the nature of capital expenditures which cannot be deducted under the provisions of the law,” said the minister.
Also, any damages from the transfer of VDA will not be allowed to be offset against the income arising from the transfer of another VDA, he added.
The FY23 budget also proposed a 1% TDS on payments to virtual currencies above Rs 10,000 per annum and taxation of such gifts in the hands of the recipient. The threshold for TDS would be Rs 50,000 per annum for certain individuals including individuals/HUFs who are required to have their accounts audited under the Income Tax Act. The provisions regarding 1% TDS will come into effect from July 1, 2022.
Separately, the government is working on a legal framework for cryptocurrencies, but no draft has been released for public consultation yet. Currently, cryptocurrencies are not regulated in India.
This post Crypto Mining Fees Are Not Allowed As A Tax Deduction: Govt
was original published at “https://www.financialexpress.com/digital-currency/crypto-mining-cost-wont-be-allowed-as-tax-deduction-govt/2467226/”
