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After Budget 2024, the situation is like 'kaho khushi, kaho ghum'. Crypto futures and options investors are happy with the budget.
They do not have to pay securities transaction tax, tax deduction at source, 30 percent flat crypto gains tax. As a result, investors may find crypto F&O transactions attractive.
In Budget 2024, the Securities Transaction Tax (STT) has been increased on all futures and options (F&O) contracts traded on recognized stock exchanges. Of course, this increase does not apply to cryptocurrency F&O transactions. Also, some crypto exchanges have taken a stance of not deducting tax deducted at source (TDS) on crypto F&O transactions. Not only this, these transactions do not fall under the purview of the 30 percent flat crypto gains tax.
Broadly, the budget amendment has changed the STT rates for F&O transactions in securities. This amendment will not apply to crypto transactions. Because, crypto transactions are classified as goods. Therefore, the rules for crypto F&O transactions with respect to TDS and Section 115BBH tax rate will remain unchanged. No STT is charged on these transactions.
As per section 194S, one per cent TDS will be deducted on all VDA transactions from July 1, 2022. A new section 194S was added regarding TDS on payments while transferring VDA through the Finance Act 2022. By virtue of this provision, any person making payment (above the prescribed limit) to any resident for transfer of Virtual Digital Assets (VDA) shall be liable to deduction of TDS at source at the rate of one per cent of the value of the VDA.