Things to keep your crypto wallets clean and organized in 2023 if you live in India
In recent years, cryptocurrencies have skyrocketed in popularity, and India is no exception. Indians are becoming more interested in investing in cryptocurrencies like Bitcoin, Ethereum, and others, despite the government’s resistance to accepting them. The convenience of transactions, the potential for huge returns, and the growing skepticism towards conventional financial institutions are only a few of the reasons for the increase in popularity.
But as well quoted by one of the favorite superheroes of all time Spiderman, “with great powers, comes great responsibilities”, this indeed is applicable to the investors and traders trying to make money in the crypto market Even the most experienced investors may find India’s complicated system of rules and regulations concerning taxation to be overwhelming. But in order to ensure that you abide by the law and prevent any legal penalties, it is essential that you maintain precise and current records of your crypto tax in India. If you don’t, you risk incurring costly fines and penalties that will have a negative influence on your investment results. The necessity of maintaining a tax record while making investments in India, the repercussions of non-compliance, and some advice to assist you to remain on top of your tax duties will all be covered in this article. Therefore, in this article, we will try to put up the 3 most important things you need to keep in mind while trying to organize and monitor your crypto tax obligations in 2023 if you live in India and are trying to make money from investing and trading in cryptocurrencies.
1. You can no more dodge paying taxes on your Crypto gains in India
The good old days, when crypto gains were not taxed separately are gone for India. On February 1, 2022, the hon’ble Finance Minister of India Mrs. Nirmala Sitharaman, presented the Annual Budget for the financial year 2022-23. In this bill, she introduced a new dedicated sub-section to tax the crypto gains separately called Virtual Digital Assets Taxation Scheme (Section 115BBH) under the Income Tax Act – 1995 according to which, taxpayers will have to pay a tax of 30% on their net income from all the Virtual Digital Assets.
2. How much tax are you obliged to pay?
As mentioned in the above section, a net tax of 30% will be charged on the profits made in the crypto market. Along with this, a TDS of 1% is charged at the source if the transaction amount is greater than or equal to ₹50,000/- on the crypto TDS date i.e. 01st July 2022.
3. Keep your record books as simplified as possible
The rules and regulations are dynamically changing around the new form of currency i.e. crypto. It can be a mind-boggling task to manage your multiple wallets across different exchanges and then calculate taxes manually on all transactions. Binocs can be your day-saver! You can use Binocs which allows you to unify all transactions of your crypto wallets from 100+ wallets and 50+ exchanges under one umbrella, and then automatically dashboard your tax breakdowns and download the final report.