The Finance Ministry does not expect any significant mop-up from the new income tax structure on Virtual Digital Assets (VDA), popularly known as cryptos, in the first advance tax collection falling due on June 15, reports Hindu Business Line.
The new taxation regime for VDAs came into effect from April 1.
“Cryptos have seen a huge fall this fiscal and people are losing money so who will pay advance tax now?” a top Finance Ministry official said, reported Business Line.
The Finance Act, 2022, has proposed that any income from the transfer of VDA will be taxed at the rate of 30 per cent.
One can pay the advance tax in four instalments by the 15th day of June, September, December and March.
On or before June 15, 15 per cent of the advance tax is payable. By September 15, it should be 45 per cent less the amount already paid. By December 15, 75 per cent of advance tax less that already paid and the balance by March 15. Non-payment of advance tax will invite interest.
The official also said the Income Tax Department is working on a detailed FAQ along with rules to bring clarity to various tax issue surrounding VDAs.
“It should be out much before the due date of the first advance tax instalment so that assesses do not have any doubt in compliance,” he said.
Tax officials have already clarified that they will rely more on voluntary disclosure on the acquisition cost of VDA.
Accordingly, the Department will rely on the price of acquisition mentioned by the investor and income earned will be considered for taxation. However, in case of even the slightest doubt, the disclosure will be thoroughly re-examined, the official said.