India Introduces 30% Tax On All Crypto Income
After months of all kinds of rumors, a little bit of clarity is finally coming out of India regarding cryptocurrency regulation.
The Indian government has announced a plan to tax income from cryptocurrency and non-fungible token (NFT) transactions by 30%. The country’s finance minister Nirmala Sitharaman also proposed a 1% tax deduction on payments related to crypto purchases.
“No deduction in respect of any expenditure or allowance shall be allowed while computing such income except cost of acquisition. Further, loss from transfer of digital asset cannot be set off against any other income… Gift of virtual digital asset is also proposed to be taxed at the hand of the recipient.”
The finance minister said that the sheer volume of transfer of digital assets meant it was “imperative” to create a specific tax regime on the space.
Simultaneously, Sitharaman announced plans for launching its central bank digital currency (CBDC). According to the finance minister, a digital rupee could be issued “using blockchain and other technologies” and will be launched by the Royal Bank of India at some point during this year or 2023.
“Introduction of a central bank digital currency will give a big boost to digital economy. Digital currency will also lead to a more efficient and cheaper currency management system,” she said.
“The biggest development today was a clarity on crypto taxation. This will add the much needed recognition to the crypto ecosystem of India. We also hope to this development removes any ambiguity for banks, and they can provide financial services to the crypto industry. Overall, it’s a good news for us, and we will need to go through the detailed version of the budget to understand the finer details, ” Nischal Shetty, Founder and CEO of Indian cryptocurrency exchange WazirX told The Indian Express.
The news from India, the second-largest country by population in the world, comes after ongoing fears of a blanket-ban on cryptocurrencies. In January of 2021, the government said it would put forth a bill that would ban all private crypto assets while creating a sovereign digital currency.
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.