[Naetik30]

Originally Posted by Jaguar

I somehow feel the customer point business is some sort of a scam to carry out illegal transactions outside of the bank. ...

I have the same feeling. In the case I quote above, the SBI branch is 100 feet away. And this customer service point is on a narrow street close by.

When I visit the branch for my work, few times I have noticed the old folks walk in to branch asking for their pension and they are immediately shooed away by the branch staff and told to walk to the CSP (Customer service point).

Infact took a pic of the CSP board which has details to may be lodge a complaint. But better sense prevailed after a relative was threatened for trying to help someone get their due.

[Pancham]

Originally Posted by AirbusCapt

In one shot the government has finished the crypto trade market in India. With an average daily movement of 8/9% there is no feasible way for a trader to make enough money to pay a 30% tax. Most of the folks who had lost their jobs were supplementing their income by crypto and stock trading, this government has destroyed their main source of earnings.

Sorry Captain but just to clarify (apologies if my understanding is incorrect): 30% tax is on the earning (profit). So if someone earns an 8% profit, the tax is 30% of 8%. So net profit comes to 5.6%.

In hindsight, Crypto is great. Because we see crypto millionaires and billionaires flaunting their fancy cars on Instagram. But it is also super risky. So I don't think someone should entirely depend on crypto - just my view. Naturally, government might not think of it as an alterative to jobs.

[praveen_v]

There has been lot of debate on the crypto taxation and whether taxing cryptos make it legal. Looks like FM has specifically called this out and said taxation does not mean it is legal.



FM also mentioned in her budget speech yesterday that when IT department does a search operation and unearthed undisclosed income (which in most cases would be illegal?) those people were making a case by trying to offset that undisclosed income against other losses. This loophole was also closed which means this was being exploited by people hiding income. So even though income can be through illegal means IT Dept can still go ahead and tax it.

[m8002?]

Originally Posted by praveen_v

There has been lot of debate on the crypto taxation and whether taxing cryptos make it legal. Looks like FM has specifically called this out and said taxation does not mean it is legal.

[/b]

The discussion here is : what exactly does the highlighted text mean. Since it is not legal, does it mean its illegal? In that case, govt. cannot tax it.

The govt. has not made it clear if its legal or illegal. But is happy to tax it.

[Pancham]

Originally Posted by m8002?

The discussion here is : what exactly does the highlighted text mean. Since it is not legal, does it mean its illegal? In that case, govt. cannot tax it.

The govt. has not made it clear if its legal or illegal. But is happy to tax it.

For your information, government can tax illegal income. Look up for past cases, you will find plenty. Legality and taxability of income are two separate things.

[ValarMorghulis]

Originally Posted by m8002?

The discussion here is : what exactly does the highlighted text mean. Since it is not legal, does it mean its illegal? In that case, govt. cannot tax it.

The govt. has not made it clear if its legal or illegal. But is happy to tax it.

Only a messenger here:
Summary: Basically pay up tax irrespective of the legality of income.

Legality and taxation are two different things and fall under two different acts of the constitution. In fact a quick search throws multiple such cases where the courts ruled that

...the taint of illegality or wrong-doing associated with income, profits and gains is immaterial for the purpose of taxation. Even if a trade is illegal, it is still a trade within the meaning of the Act, and its income, profits and gains are chargeable with income tax.

Link

Illegality tainted with the earning has no bearing on its taxability. Income generated by engaging in liquor trade, generally called as res extra commercium, otherwise known as trade in crime, or income earned by way of selling Khadhi products, are one and the same for the tax authorities. The assessee having acquired income by unethical manner or by resorting to acts forbidden by law, cannot be heard to say that the State cannot be a party to such sharing of ill-gotten wealth. In case of allowing such income to escape the tax net would be nothing but a premium or reward to a person for doing an illegal trade. In the event of taxing the income of only those who acquired the same through legal manner, the tendency of those who acquired income by illegal means would increase. It is not possible for the income tax authorities to act like police to prevent the commission of unlawful acts but it is possible for the tax machinery to tax such income. During such process strict rules of evidence are not applicable to the income tax authorities. Those pieces of evidence which are not sufficient in ordinary legal proceedings to prove a particular fact would be sufficient for the tax officials to assess the income of an individual.

The income tax Act considers the income earned legally as well as tainted income alike. There is nothing like an illegal income so far as the Tax Collector is concerned. Even if the assessee was prosecuted by Law Enforcing authorities for commission of offence, the income earned by the offender still would be an income liable for assessment. It is not a defence in such cases that the State is also becoming a party to the illegal act by sharing the booty.

Link 1: Link 2

[dragonfire]

So let me get this straight. They want us to declare in the income tax filing that we have earned x amount illegally and want to pay 30% tax on it.

What happens next? Are you forgiven for the crime the moment you pay that tax?

Or they can send you to jail for the crime?

And then what? They will give you a computer in jail so that you continue making profits trading illegally from in there so that they can continue taxing it?

What stupid law is that?

At least the FM show have some shame left in her.

[AROO7]

Originally Posted by Pancham

30% tax is on the earning (profit). So if someone earns an 8% profit, the tax is 30% of 8%. So net profit comes to 5.6%.

Totally correct explanation there @Pancham will just add one more point as you missed it. The only difference with the crypto here is that since it is taxed as an asset, the loss you make in crypto trading can not be used to offset the profit you generate in other income (e.g. equity). Why this is very important is because in equity you can claim the losses for up to two years against any profit made to reduce the taxable amount.

Originally Posted by vasanthn21

Side note: Wonder if the "Digital Rupee" will also increase in value like the crypto currencies? Will Digital Rupee exist in parallel to normal Rupee? If yes, can I demand payment in Digital Rupee instead of normal Rupee for a transaction?
Can the experts on this topic can shed some light on this?

Unless the digital rupee is traded on a trading platform it won't appreciate. Plus the digital rupee will be like a legal tender but in this case, the RBI will reduce its expenditure on printing new notes, raw material, security, and transportation. Although things aren't very clear as of now how this digital rupee will pan out in the future. That said, in case you want to read more on something similar you can read this piece from Finshots titled 'What is China's Digital Yuan?' here.

[niv26]

I have one general question. why we income taxpayers, can't claim an input tax credit for the taxes we pay towards car registrations, GST paid for our spending etc.
Business people claim input tax credit on everything(including personal expenses like cars/tv/... unofficially on the name of the business).
Isn't double taxation?

[AROO7]

Originally Posted by niv26

I have one general question. why we income taxpayers, can't claim an input tax credit for the taxes we pay towards car registrations, GST paid for our spending etc.
Business people claim input tax credit on everything(including personal expenses like cars/tv/... unofficially on the name of the business).
Isn't double taxation?

No, it isn't. Businesspersons claim them under business expenses and also claim the reduction benefit on deperication. Some do it the right way but some have been exploiting a lot around these provisions in the law. (eg- lot of Apple products are brought this way )

[m8002?]

Originally Posted by ValarMorghulis

Only a messenger here:
Summary: Basically pay up tax irrespective of the legality of income.

Legality and taxation are two different things and fall under two different acts of the constitution. In fact a quick search throws multiple such cases where the courts ruled that


Link

Guess you learn something new everyday, thanks to T-Bhp.

To my simple mind, the govt. can demand tax on legally earned but undisclosed income ( For ex. a shopkeeper not showing the profits in soap sales in the IT filing ). But if the income was through some illegal means, it cannot be taxed but fully obfuscated ( For ex. a drug dealer who made profits selling LSD ).

Now, if the drug dealer pays 30% of profits to govt, is he absolved of the crime? Or should a govt. representative also spend time in jail with the dealer for sharing the spoils of the crime?

[sukhbirST]

Originally Posted by saisree

A flat budget, not a populist one as expected. No changes to the direct taxes.

Welcome the expenditure on the Infrastructure
1. 400 Vande Bharat express trains,
2. 25000 Kms of road in to National Highways,
3. 2000 Kms of Rail Network
4. 100 New Cargo terminals

Some concentration and boost for EV and Solar Power sectors

Thanks for bringing the pertinent points which concern all of us. Few years down the lane we must see how much of all these are fulfilled. Vande bharat trains have to succeed and survive in the long run before premium train travel becomes common.

[niv26]

Originally Posted by AROO7

No, it isn't. Businesspersons claim them under business expenses and also claim the reduction benefit on deperication. Some do it the right way but some have been exploiting a lot around these provisions in the law. (eg- lot of Apple products are brought this way )

If a businessperson can enjoy by taking input tax credit, why not a taxpayer. This is very bad system in India.

[green_ninja]

Posting a section of the Hon. Finance Minister's answer from the newspaper clipping posted by praveen_v in Post#48:

We are not taxing a currency (digital rupee) that is yet to be issued. Everything outside this is an asset created by individuals, and if profits are made in transacting that asset, it will be taxed at 30 per cent. We are also tracking every trade in the crypto world by imposing 1 per cent tax deducted at source. We have circulated a paper, and are receiving inputs. Public stakeholders are also giving their inputs. So regulation will go through that process, a we will not wait for regulation to tax people earning profits from such assets.

My understanding is that crypto is still a grey area and a consensus has not been reached as to the legality of it. In the meantime people are trading it and making plenty of money. That money will be treated as income in that FY and taxed at 30%. I think the FM is well within her right to do so.

When consensus is reached, I believe crypto will notified as legal or illegal by an Act of Parliament. If it is legal the terms and conditions will be announced in the law and IT can continue to tax it at 30% or some other rate. If it is illegal, then penalties associated with the crime will also be notified in the law. At that point IT won't tax it but ED will seize the entire funds. Plain and simple!

[BigB]

Originally Posted by dragonfire

So let me get this straight. They want us to declare in the income tax filing that we have earned x amount illegally and want to pay 30% tax on it.

Such laws cannot be enforced on retrospective basis. So don't worry you will be safe.