The tax laws that the Government announced during the Last Budget, as well as a recent answer by MoS for Finance in the Lok Sabha has created a lot of confusion among the crypto community.
While we do not yet have a formal Crypto Bill yet, we are slowly getting more hints of the government’s plans to regulate and tax crypto.
The tax rules announced so far include:
- 30% tax on income generated from transfer of virtual assets – effective from April 1, 2022.
- There will be no carry forward of losses into subsequent assessment years.
- 1% TDS on transactions – effective from July 1, 2022.
- If you gift cryptocurrencies or any other virtual digital asset, it will be taxed at the same rate at the hands of the recipient.
- The loss arising from the sale of any virtual assets cannot be set off against any other income from other virtual assets while computing tax.
- Infrastructure costs incurred in mining of VDA (eg. crypto assets) will not be treated as cost of acquisition.
What does this mean for GoSats users:
- There will not be any tax deductions on the sats you earn via GoSats.
- 1% TDS will be deducted when the value of stacked sats you withdraw is over Rs 10,000, and if the total value of withdrawals cross Rs 50,000 in a year.
- Only when the Bitcoin you’ve stacked is sold and converted, it will be taxed at 30% of the sale value.
- In the future, if and when GoSats introduce ways to redeem the sats you’ve stacked, 1% TDS will be applicable.
We hope this clears confusion that you may have had around the topic.
Stacking sats continues on as usual at GoSats, and if you’re a long-term HODLer, this shouldn’t have much of an effect on your day-to-day stacking.
If you have any further questions, please drop a comment below or reach out to us at firstname.lastname@example.org.