Crypto tax has to be paid before March 31 according to the existing tax regime. The new regime will begin on April 1.
Last month, the Government of India announced the new tax regime for crypto for the upcoming Financial Year 2022-23.
But, taxes have to be paid for the income earned during the previous year as well.
You might be wondering how come taxes can be paid on crypto when it is not even recognized. Government has been taxing crypto gains for quite a time now.
Crypto may be unregulated, but the Income Tax Act states that all incomes are taxable. It means income from any source whether legal or illegal is taxable.
Any crypto profits before April 01, 2022, are taxable as per the following:
- Short term gains
- Business income
- Other income
The profits in the categories mentioned above are taxed based on your tax slab.
Let’s say you made 2.5 lakhs total (including all other incomes), you’d have to pay zero tax.
However, if you made above 10 lakhs, you lie in the 30% bracket.
It is recommended to pay Advance Tax on profits from crypto.
March 15, is the last day to pay Advance Tax, for the financial year 2021-22 ending on March 31.
If your total tax liability is 1 lakh and you pay it after March 15, you’d have to pay interest on the tax amount.
On the contrary, if you paid extra tax, the Government pays interest to you.
Tax liability can be calculated in different ways.
Check this article which simplifies the existing crypto tax regime.
Also, here is a video by crypto tax expert, Chartered Accountant (CA) Anoush Bhasin.
To understand how to pay Advance Tax, watch this another video by CA Anoush Bhasin.
Disclaimer – Readers are advised to consult a Chartered Accountant to discuss their specific cases. The information in the article is for general information purposes only.
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