Crypto tax to kick in from April 1: Here's what experts suggest for investors

cnbctv18.com:

Cryptocurrency investors are going to feel the pinch of the higher taxes on the profits made from the sale of virtual digital assets (VDAs) with effect from April 1.  Lok Sabha passed the Finance Bill 2022 on March 25 approving the Union Budget 2022-23 and with this, the proposed tax on cryptocurrencies comes into effect from the beginning of the new financial year.The 30 percent tax on profits from the sale of cryptocurrencies was proposed by Union Finance Minister Nirmala Sitharaman in this year’s Union Budget speech.  As the new rules kick in cryptocurrency investors are worried about whether to sell their digital assets before April 1.The investors will also be levied with 1 percent TDS for every transaction related to the digital tokens and the TDS will be applicable on the transaction value even if one sells the cryptocurrencies at a loss.Also Read:Quit India movement in crypto may accelerate; Singapore, Dubai, US lap up Indian talentThe crypto experts believe that the higher tax rate will lead to a liquidity crunch in the market as the investors are expected to move to relatively safer options like stocks. The new tax rules have also led to mixed reactions among the crypto exchanges."The one percent TDS will kill liquidity, which means ultimately profitability goes down for everyone.

It's a lose-lose," said Nischal Shetty, founder, and CEO of Wazirx, one of India’s biggest crypto exchanges, reported Coindesk.New developments in the crypto space will likely push many millennials further into the stock market, and the volume of crypto investments would reduce in the coming years, according to Sumit Gwalani, co-founder of Fi.Also Read: Popstar Daler Mehndi buys land in metaverse. Here’s how you can be his