Budget 2022: 1% TDS on transfer of virtual assets above a threshold, gifts to be taxed, says FM Nirmala Sitharaman

Union Budget 2022: The Union Finance Minister Nirmala Sitharaman tabled the Union Budget 2022-23 on Tuesday, February 1, 2022. In her budget speech, there were certain important taxation related announcements.

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In her budget speech, the FM that there will be 1 per cent TDS on transfer of virtual assets above a threshold, gifts to be taxed.

1 per cent TDS on transfer of virtual assets above a threshold, gifts to be taxed: FM

— Press Trust of India (@PTI_News) February 1, 2022

In this context, Swapnil Pawar, Founder, ASQI said, "Taxing of gifts and TDS are also useful to reduce abuse of anonymity in the crypto domain. We believe that the future of crypto innovation is in KYC-compliant transactions in legally recognized tokens." 

"To provide an opportunity to correct an error, taxpayers can now file an updated return within 2 years from the relevant assessment year," FM Nirmala Sitharaman said during her Budget speech

She further added, "Both Centre and States govt employees' tax deduction limit to be increased from 10% to 14% to help the social security benefits of state govt employees and bring them at par with the Central govt employees."

She also proposed to provide that any income from transfer of any virtual digital asset shall be taxed at the rate of 30%. Also, there is no deduction in respect of any expenditure or allowance shall be allowed while computing such income, except cost of acquisition.

Furthermore, the FM declared that the customs duty on cut and polished diamonds, gems to be reduced to 5 per cent.