Crypto Taxation in India

[amicrypto]

I understand the 30% capital gains tax but what would be the tax structure for people working in freelancing roles/consultants and getting paid in crypto? Do we have any guidelines/clarity on this?

[pakhitheboss]

I understand the 30% capital gains tax but what would be the tax structure for people working in freelancing roles/consultants and getting paid in crypto? Do we have any guidelines/clarity on this?

If I am correct it is flat 30 percent for all. I do not think apart from that any other tax will be applicable for now. So, if you are getting paid in crypto for your work you still have to pay 30% flat from your earnings.

[teosanru]

I understand the 30% capital gains tax but what would be the tax structure for people working in freelancing roles/consultants and getting paid in crypto? Do we have any guidelines/clarity on this?

No there are no guidelines as to that, the verdict as of now is pretty clear no matter how you get your Cryptocurrencies the moment you sell them or exchange them you'll be charged 30% flat tax on the profit you have made but while calculation of profit the only deduction that'll be given will be cost of acquisition, which means if you get it from freelancing you won't be getting any deduction while calculating the profit the whole proceeds that you get on sale is your profit only.

[pawanjain]

I understand the 30% capital gains tax but what would be the tax structure for people working in freelancing roles/consultants and getting paid in crypto? Do we have any guidelines/clarity on this?

No there are no guidelines as to that, the verdict as of now is pretty clear no matter how you get your Cryptocurrencies the moment you sell them or exchange them you'll be charged 30% flat tax on the profit you have made but while calculation of profit the only deduction that'll be given will be cost of acquisition, which means if you get it from freelancing you won't be getting any deduction while calculating the profit the whole proceeds that you get on sale is your profit only.

Well then that is bad isn't it. If a person is earning only 3 lakhs per annum through freelancing in crypto then he should be paying 30% of it as tax.
That costs around 90,000 INR which is a huge amount if his net income is only 3 LPA.
I think the government of India should reconsider the guidelines and allow some rebate upto 5 LPA just like how it's done in ITR.

[webtricks]

...

Well then that is bad isn't it. If a person is earning only 3 lakhs per annum through freelancing in crypto then he should be paying 30% of it as tax.
That costs around 90,000 INR which is a huge amount if his net income is only 3 LPA.
I think the government of India should reconsider the guidelines and allow some rebate upto 5 LPA just like how it's done in ITR.

I don't think this is going to happen any soon. Government has added the taxation of cryptocurrencies in Chapter XII which deals with 'Determination of tax in certain special cases'. No benefit of Chapter VI-A, rebate u/s 87A and basic exemption limit is allowed for the incomes taxable under this chapter (with certain exceptions).

Also, government is currently working on a specific bill for cryptocurrencies and since there isn't much of a protest against the government's decision to tax crypto @ 30%, I don't see government changing it anytime sooner than the bill is finalized. However, we may see detailed guidelines on the taxation in coming days from the Income Tax Department (possibly before 30th June), which will clear many doubts.