New Delhi: As announced by Finance Minister Nirmala Sitharaman in her Union Budget speech, the proposed 30 per cent tax on proceeds of digital assets will lead to a huge tax collection as the turnover of the top 10 crypto exchanges in India is around Rs 1 lakh crore, said J B Mohapatra, chairman of Central Board of Direct Taxes (CBDT).
The finance minister has also announced to introduce India’s own digital currency this year.
A 30 per cent tax on income from transfer of digital assets, which include cryptocurrencies and non-fungible tokens (NFTs), is also proposed in the Budget.
The CBDT chairman has told ANI there are nearly 40 crypto exchanges in the country, of these 10 exchanges are having significant transactions. The total turnover of these 10 exchanges is between Rs 34,000 and Rs 1 lakh crore.
The CBDT chairman told ANI, “If we charge TDS at 1 per cent on these turnovers, you can estimate the collection income tax will get through TDS. The proposal to tax 30 per cent on individuals from April 1 will generate huge revenue for the government. However, it be difficult to specify the exact amount by taxing the transactions of digital assets.”
Mohapatra said, “During our pilot project on crypto we found that they are operating on four models. People are trading in crypto but they are not filing it in their income tax returns. Those crypto traders filing their income tax returns have no indication of crypto trading. The third model, we found that there are details of crypto trading but their estimates of stock sale and purchase or cryptos are wrong. The fourth model shows the details of crypto profits in their income tax return but they show it as income from other sources, income from capital gains, or income from the business. In suspicious cases, income tax returns were not filed. This is very problematic for us,” the CBDT chairman added.