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Income Tax Department rectifies error, sticks to 1% TDS on virtual assets: Check details

Income Tax Department rectifies error, sticks to 1% TDS on virtual assets: Check details The Income Tax Department’s website has updated its document on TDS, reiterating that the tax deductible at source on virtual digital assets remains at 1 percent. The department’s website earlier mentioned that the TDS rate

  • Posted on 09th Jun, 2022 19:07 PM
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Income Tax Department rectifies error, sticks to 1% TDS on virtual assets: Check details Image

The Income Tax Department’s website has updated its document on TDS, reiterating that the tax deductible at source on virtual digital assets remains at 1 percent. The department’s website earlier mentioned that the TDS rate for virtual digital assets has been brought down to 0.1 percent from the 1 percent TDS on such assets. Also Read - How to apply for e-PAN through Aadhaar Card in simple steps

However, the website updated the document rectifying the error after the change was noticed.

“Some media reports have come to the notice of CBDT claiming that the rate of TDS on Virtual Digital Assets (VDA) has been reduced to 0.1 percent. It is hereby clarified that there is no change in the rate of TDS on VDA, which continues to be 1 percent,” read the official clarification.

“It is hereby clarified that there is no change in the rate of TDS on VDA, which continues to be 1 percent,” the statement further added.

Finance Minister Nirmala Sitharaman, on February 1 announced that investors’ will have to pay a 30 percent tax will on income earned by making investments in cryptocurrency.

“Cryptocurrencies will be taxed at 30 percent. Any income from the transfer of any virtual digital asset shall be taxed at 30 percent. No deductions and exemptions are allowed. Loss from the transfer of such assets cannot be set off against any other income,” Finance Minister Sitharaman said while presenting the Union Budget 2022.

Industry players and experts are hoping that the introduction of a 30 percent tax on crypto income will clear the roadmap for the crypto industry.

Economic affairs secretary Ajay Seth recently said that the Inflation in India should moderate in coming months and the government is ready with its consultation paper on cryptocurrencies. According to Seth, there needed to be a global consensus reached on cryptocurrencies and India would look at regulations enforced in other countries before deciding how it would regulate, reports Reuters.

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