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Cryptocurrency Exchange Have To Store KYC And Transaction Records For 5 Years As Per New Rules

As per the new guidelines issued by the Indian Government, All cryptocurrency exchanges have to store KYC and Transaction records for 5 years. This is necessary for new tax guidelines and for keeping safe and secure to the crypto users.

Cryptocurrency in India is always in new stories. This is because of their new rules and regulations. Either they are related to crypto Tax or for exchange storing KYC data for 5 years.

Crypto Expert and Asset Guide owner told to wjsnews.com that as per new rules and guidelines issued by the ministry of electronics and information technology, all crypto exchanges have to store customers’ data KYC and transaction records for 5 years.

New Rules For Crypto Exchanges


 

As we all know now, some instruction has been given to the exchange. According to which it is very necessary to complete KYC on the exchange and all the transaction records of the customer will be recorded for 5 years.

Such special steps are being taken to prevent scams in cryptocurrency. Along with this, it is also a very important and commendable step for those who cheat the government and evade tax.

Benefits of New Crypto Rules

  • It will increase the white circulation of virtual assets.
  • Circulation of crypto becomes more reliable because exchanges are storing KYC data.
  • Hacking and fraud will be eliminated up to 99% by this step.

Who is Applicable for the New Crypto Guidelines

All individuals trading on any centralized exchange have to complete KYC before trading.

The exchange may provide transaction data for tax calculation with the five-year records.

Taxation will become easy, similar to banks and the Security and exchange board of India. As per the banking guidelines, banks can provide transaction records for filing ITR. Similarly, now crypto exchanges will be able to provide transaction records for the last five years.

FAQs

Do we have to pay tax with the last five years’ transaction records?

No, this rule is for the upcoming five years plan.

Do we have to pay tax on decentralized exchanges?

No decentralized exchanges are free from any kind of tracking.

Do decentralized exchanges also keep 5 years transaction records?

no.

Crypto Tax Rule

For cryptocurrency tax in India, you have to pay 30% of your profit to the government. Income from cryptocurrency will be considered business income.

According to the rule, if you are investing ₹ 100000, and you are getting a return of ₹ 500000. In this condition your total profit becomes ₹ 400000 then you have to pay a tax of 30% on ₹ 400000.

If we calculate the tax of 30% on the rupee, then it works out to about ₹ 120000.

Crypt Tax Start Date

Cryptocurrency tax in India started on April 1, 2022, before that there were many ups and downs regarding cryptocurrency regulation in India. Now, according to the new rules, it has become mandatory for all cryptocurrency exchanges to do the KYC of the customer. And along with it, the guidelines for keeping financial records for 5 years have also been given by the IT Ministry.

What does Will happen With The Transaction Record?

All cryptocurrency exchanges will record the customer’s transactional record for 5 years so that it can be used for tax calculations. This step has been taken keeping in mind the cybersecurity, now you do not err in your tax at all, if anything is found wrong then the data of your PAN number will be matched with the data of the exchange.

Thus, you can no longer make any mistake while transacting in cryptocurrency. Let us tell you that 1% TDS will also be charged to you while trading on all centralized exchanges.

This process will start on 1st July 2022, and it will be already added to your income tax return form. If you are a small investor and your annual income is less than ₹ 500000 then you can claim this 1% TDS.

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