This TAX might not be directly related to cryptocurrency transactions. There are still alternative ways to spend crypto for international transfer and it may open doors for additional taxes. Let me give you three scenarios. If you have more than do share!
- You purchased a Bitrefill coupon using your Bitcoin for makemytrip.com. The package is a honeymoon tour or a simple vacation. The package you purchased will now get costlier by 20%(from July) and you might incur an additional tax of 30%.
- You sell your cryptocurrency asset and then make an international transaction using your debit card or credit card in this scenario you will be paying 50% tax.
- You made some good profit out of cryptocurrency trading. You would now want to use those funds to pay your child's admission fee into an international university. In this scenario, you would again pay 50% tax.
There can be numerous scenarios depending on your age and requirements. The point here is that international transactions which were taxed at 0.5% will now be taxed at 20%. I will not blame the politicians. They do what is suggested by the BABUS and one of them drafted this bill convinced others and showed the minister a simple way to gain more tax.
Why would those BABUS do it? What made them come up with such a shit tax. Currently we as a country were on the verge of becoming a cashless economy. After July we will again go back to a cash economy for international transactions.
No no no just a second. It's very different from what you are saying.
TCS is merely tax collected at source. You pay this tax for once and will eventually get a refund of it or can adjust it against your tax liability. This isn't bringing any additional liability on you for taxes but yes a big liquidity issue for you if you are planning to go abroad and spend. It'll be like keeping 20% extra money blocked while making any foreign transaction for around an year. I would say a very foolish move. So obviously it's different from the 30% tax on cryptos as it has to be paid by you to government you don't get any refund for it. This tax you can easily get as a refund but obviously after filling of return and the gap from payment to refund can be as long as 18 months.
Edit: Also the onus of deducting tax will be on the bank that you use to pay this, so no additional filling or any such thing as well. But yes still a very big stupidity adding unnecessary restrictions on everything.
