According to the new income tax rules, those who invest in cryptocurrencies will now have to pay the highest income tax rate of 30% on income from the sale of crypto or NFT. Prior to the fiscal year 2022-23, cryptocurrencies were not subject to income tax. In such a case, most people who transacted in crypto currency used to pay the tax by redeeming the crypto currency and claiming a financial gain or a business advantage. It is a different story that the new income tax rules for crypto currency will now have a significant impact on the crypto industry. According to the new income tax rules, those who invest in crypto currency will now have to pay the highest income tax rate of 30% on income from the sale of crypto or NFT. Furthermore, unlike other asset classes, retail investors will not be able to claim expenses or losses in crypto currency

Every transaction is subject to a 1% TDS: To keep track of crypto transactions, the government has imposed a 1% TDS on all crypto currency transfers. All of these rules went into effect on July 1, 2022. This new TDS provision will also have an impact on crypto currency investment throughout the day. As a result, cryptocurrency investments will be frozen for one year until an income tax return is filed and a refund is claimed. According to the newly added section 194S, from July 1, one percent TDS will be levied at source on payments of more than Rs 10,000 in digital assets or cryptocurrency in a year. On June 21, the Central Board of Direct Taxes issued a notification to implement the new provision.

Crypto transactions are declining: This is why, in the days following the implementation of the new rules, there was a decrease in cryptocurrency transactions. According to experts, there is a chance that this will continue to decline. However, before implementing the new TDS rule, the government has clarified a few points. To protect crypto traders from misfortune, the responsibility for TDS has been fixed for crypto trading platforms.