No deductions and set-offs are available for crypto taxes, the minister of state, finance ministry, Pankaj Chaudhary clarified during the Lok Sabha session on Monday.
Congress MP Karti P Chidambaram had asked the minister questions on the status of cryptocurrencies in India, in particular its legal status.
The Congress MP also sought clarity on whether the infrastructure costs incurred during mining of cryptocurrencies could be treated as cost of acquisition and, thereby, deducted. It is interesting to note that such deductions can be claimed for regulated investments.
Moreover, Chidambaram also wanted clarity on whether the loss due to transfer of virtual digital assets could be set off against profits from other virtual digital assets. It is noteworthy to mention that loss incurred from transfer of virtual digital assets cannot be set off against other incomes.
Chaudhary in his response pointed out that cryptocurrencies are not regulated in India. Furthermore, he quoted the Finance Bill 2022 to say that no deductions or set-offs would be allowed in any case when it comes to taxes on cryptocurrencies.
It is important to point out that India has taken a somewhat tough stance when it comes to cryptocurrencies and virtual digital assets. Moreover, the Reserve Bank of India (RBI) has time and again expressed their apprehensions about crypto assets.