Tax on Crypto Currency

Q1: Is GST applicable on Crypto Currency?

A: Crypto currency is neither recognized as currency nor security and it does not fall under any of the category of exempted or non taxable supply.

Thus, GST is applicable on it.

In case a person is selling the crypto currency and it is registered under the GST Act, it should pay the GST on crypto currency.

In case a person is selling the crypto currency and is not registered in the GST, in this case it needed to be checked whether it is crossing the threshold of GST Reg limit or not. Only then it can be ascertained that weather GST should be paid or not.

Q2: How is Income Tax Payable on Crypto Currency?

A: Income Tax is payable @ 30% on transfer of Crypto currency.

Here the meaning of transfer, includes the belows:-

• sale
• exchange
• relinquishment
• transfer

It simply means if some one is selling the crypto currency, it is subject to tax

If some one is exchanging the crypto currency with another crypto currency, it is taxable

If some one is exchanging the crypto currency with Rupee, it is taxable

Q3: What if crypto currency is sold at loss?

A: The loss on crypto currency is not allowed to be set off against the profit and is also not allowed to be c/f.

Q4: What are the examples of Crypto currencies?

A: Bitcoin, USDT, Ethereum etc

Q5: TDS on Crypto Currency?

A: TDS is deducted on buy and sale both transactions @ 1%. In case a person is dealing in crypto currency in India via some exchange, the exchange should do the compliance on behalf of the buyer and seller.

In case a person is dealing in crypto currency via some exchange outside India, or without exchange, the person is himself required to do the TDS compliance via filing of Form 26Q at Income Tax portal