Cryptocurrency in India: Budget 2022 should clarify govt stance, says Archit Gupta
The Union Budget 2022 is expected to bring clarity on cryptocurrency tax, says Archit Gupta, Founder and CEO, Clear.
Union Finance Minister Nirmala Sitharaman is all set to present Union Budget 2022 on February 1, 2022. The budget session of Parliament will begin on January 31, with the address of President Ram Nath Kovind. Several sectors have come out with their expectations and suggestions for the Budget. As the government stance on its cryptocurrency bill is still awaited, not everyone has clarity on the issue. Archit Gupta, Founder and CEO, Clear has shared his views on cryptocurrency tax, his expectations and other details ahead of the presentation of the Budget.
On cryptocurrency taxation, the Gupta said, "While the government is waiting on the cryptocurrency bill, much-needed clarity is expected on its taxation in the upcoming Union Budget 2022. There are various concerns about the taxation of crypto, its classification, applicable tax rates, TDS/TCS and GST implications on the sale and purchase of cryptocurrencies, etc. which we are hoping will be clarified during the budget session."
New tax regime:
The founder and CEO of Clear said that the Finance Ministry may revise the personal income tax slab in this year's Budget. Many experts believe that the two tax regimes still confuse the common man. The government may consider increasing the highest tax slab to Rs.20 lakh from Rs.15 lakh or allow certain deductions to make the new regime more enticing. Budget 2021 did not provide any major relief to the salaried class, he added.
Standard deduction and work from home tax deduction:
The Budget 2021 may introduce tax-free work from home allowances for salaried employees. Allowing deductions for such expenses will raise the take-home salary, ultimately creating demand for goods and services in the country, Gupta said.
Due to the high direct tax collection this fiscal year, there may be a scope to increase tax deduction limits. For instance, the standard deduction available to those with salary income may be raised, currently at Rs.50,000. This may be adjusted for inflation every year.
He further said that Section 80C and Section 80D limits are certainly expected to be increased this year as they have been the same for so long. Also, high direct tax collection during this fiscal year may help with upward revision of these limits. A higher deduction under Section 80C may be permitted for the Equity-Linked Savings Scheme (ELSS), or a separate limit can be defined to encourage more mutual fund investments in India. Further, a special COVID expense related deduction may be allowed under Section 80D or 80DDB to provide tax relief for COVID-19 patients and their families.