Ever since the government has come out with the budget 2022, there is a huge buzz regarding cryptocurrency taxation.
Government has placed 30% tax on crypto currency ohh…sorry virtual assets. People are keep on searching how to avoid this tax.
People are suggesting strategies like holding crypto for long and not to sell them, 🙄 well they are partially right, you pay tax only when you sell the asset but just think about it, is it practical that you earned profit on butcoin and you can’t realize that profit in cash then what is the benifit so i don’t think it is proper tax saving strategy because of we look at the intent of the goverment, it may possibly put a blanket ban on traditional cryptocurrencies to promote thier own crypto currencies.
step 1: Transfer you crypto holdings from indian cryoto exchange to foreign crypto exchange
step 2: Sell your Crypto holdings for foreign currency( say $)
Step3: Now there are 3 options
Or
If you have any foreign relative then you give this foreign currency to those relatives and ask them to that foreign currency to you as gift. Gift is exempt under proviso to section 56(2)(x).
This way you can covert your foreign currency into rupees in lump sum.
Or
If you don’t have any foreign relative then you take gift from any foreigner
If you receive gift on your marriage or otherwise the amount of gift is less then 50000.
So this way you can save or at least reduce your tax liability.
The rules are yet to come so we don’t know for how long this strategy will work. So i will suggest you to transfer your holdings from indian to a foreign crypto exchange before april 1st, 2022
