Wednesday, November 23, 2022
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No change in income tax, 30 pc tax on income from cryptocurrency

Belying expectations, Finance Minister Nirmala Sitharaman did not tinker with the personal income tax rates in the Budget for 2022-23.

The minister also did not raise standard deduction, which was widely anticipated in view of elevated inflation levels and impact of the pandemic on the middle class.

The standard deduction currently stands at Rs 50,000.

There was no change income tax slabs in the personal income tax category in the Budget unveiled on Tuesday.

The corporate tax rate too was kept at the same level. However, concessional rate of 15 per cent has been extended by one year for newly incorporated manufacturing units.

Giving clarity on taxation of cryptocurrencies and other virtual assets, Finance Minister Nirmala Sitharaman on Tuesday proposed a 30 per cent tax on income from transactions in such assets.

Also, to bring such assets under the tax net, she proposed a 1 per cent TDS (tax deducted at source) on transactions in such asset classes above a certain threshold.

Gifts in crypto and digital assets will also be taxed, she said.

The tax proposals will come into effect from April 1 after the passage of the Union Budget in Parliament.

Meeting demands from large sections of industry, she said the RBI will launch a ‘Digital Rupee’ based on blockchain technology in 2022-23.

Experts said the 30 per cent tax levied on income arising from the sale of cryptocurrency is similar to the tax rate on winnings from lottery, game shows, puzzles etc.

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