Your Queries – Income Tax: Better to pay 30% tax on capital gains on crypto sales in FY22 too

Budget 2022 clarified that from April 1, 2022, tax at 30% plus cess plus surcharge would be applicable on capital gains from crypto assets.

By Chirag Nangia

I have a Rs 9.5-lakh portfolio in cryptos. I need to liquidate some of them. They have gained 9%. What would be the taxability on them? —Harshit Jindal
Budget 2022 clarified that from April 1, 2022, tax at 30% plus cess plus surcharge would be applicable on capital gains from crypto assets. Additionally, 1% TDS on transfers from July 1, 2022 is proposed. However, taxation of capital gains from crypto assets for FY 2021-22 was not mentioned in Budget 2022. Thus for the current year it may be classified as ‘Income from business and profession’ or from ‘Capital Gains’, depending on whether held as stock-in-trade or held as investment. A more conservative view is to pay 30% tax on these gains, irrespective of period of holding, as proposed in Budget 2022 to avoid any litigation.

My daughter’s only income is the LTCG on sale of mutual fund units. In such a case, to what extent the LTCG is not taxable? —Sunil Walunjkar
Long-term capital gains on sale of mutual funds can be from equity-oriented mutual funds and debt-oriented mutual funds. The LTCG on sale of equity-oriented mutual funds exceeding Rs 1 lakh is taxable at 10% plus cess plus surcharge (if applicable) with no indexation benefit. However, LTCG on sale of debt oriented mutual funds is taxable at 20% plus cess plus surcharge after indexation benefit. Such LTCG on mutual funds can be adjusted against basic exemption limit i.e. Rs 2.5 lakh, in the instant case. No deduction is allowed under Section 80C in lieu of such LTCG.

My father is a super senior citizen. He derives Rs 15 lakh as rental income, Rs 12 lakh as dividend and interest and Rs 10 lakh as capital gains from shares. Is he liable to pay GST? What is the threshold limit to pay GST on rent if no income is derived from business ? —Rajesh B Shah
GST on renting of immovable property is classified as Supply of Service and is taxed at 18%. However, renting of residential dwelling for residential purpose is exempt and any other type of lease or renting of immovable property for commercial purpose attracts GST. Since in the instant case, total rental income (assumed commercial) is less than `20 lakh, the landlord will be exempt from taking GST registration and hence no GST on rent is to be collected.

The writer is director, Nangia Andersen India. Send your queries to fepersonalfinance@expressindia.com