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Budget 2022: Crypto Tax, No Bonus Stripping and Twitter Threads


Crypto Taxation!

Virtual Digital Assets, when you sell or transfer them, will be taxed at 30% of profits. Few salient points:

  • No costs allowed (you can’t take out costs of mining etc.)
  • Losses if any cannot be offset against losses on any other head
  • No carrying forward of losses
  • This is similar to Lottery wins – you can’t offset costs, or offset losses, or carry any losses forward
  • This doesn’t not make crypto legal, but taxes you on any gains

Additionally, 1% TDS has to be cut on the selling value of each trade. We don’t know how this will pan out, but initially, expect exchanges to comply with this.

If TDS is cut, then the money is paid for your PAN, and you can use that to offset any tax (including on crypto or otherwise).


No more bonus stripping!

We’ve spoken of bonus stripping in the past – legally, we could defer taxes and reduce them by buying bonus shares before the record date, and selling some of them for a “notional” loss after. This was allowed for shares, but has now been removed in the budget.

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