The Indian Government on Tuesday has declared that they are going to enforce a tax of 30% on the income obtained from virtual currencies like non-fungible tokens (NFTs) and Cryptocurrencies. This step will vanish the speculation regarding the ban on cryptocurrency by the Government.
Incomes gained by transferring any digital asset will be taxed at 30%. In addition to that, there will be an additional tax of 1%. The source will deduct this tax during such kinds of transfers. This information is given by finance minister Nirmala Sitharaman in Parliament while delivering an annual budget speech.
Furthermore, she also said that cryptocurrency tax would be different from the U.S because this tax is separate from the tax imposed on capital gains that you get from other means like investments in funds and stocks.
Investors of crypto in the country will not be allowed to offset their cryptocurrencies losses against any other means of income. She further said that the people who receive virtual assets as gifts also have to pay taxes.
All these proposals are part of the annual budget of India, which is likely to be passed later this month by the Parliament before moving into effect on the 1st of April.
Sitharaman also revealed that India’s central bank would hopefully issue the very own digital currency of India during the 2022-23 financial year.
The budget proposals have given rise to several confusions regarding the legality of cryptocurrency in India. The reason behind it is the government’s cryptocurrency bill that is currently in its drafting stage, and it has not been introduced in Parliament till now. According to most observers, this budget will mitigate the concerns regarding the possibility of a ban on cryptocurrency.
Sumit Gupta, the CEO, and co-founder of one of India’s biggest crypto exchanges called CoinDCX, tweeted about the taxation. The crux or summary of his tweet is that taxation of digital assets or crypto is the right step. It will provide a hefty amount of charity. Furthermore, he also welcomed the focus of India on the promotion of blockchain and digital innovation. He thinks that for crypto investors in India, this is excellent news.
As mentioned above, before the declaration of Tuesday’s budget, there were considerable doubts and speculations about cryptocurrency regulations in India. There are reports that the Reserve Bank of India, the central bank of India, aims for a complete ban on all types of cryptocurrency transactions. Despite all these restrictions and prohibitions, increased crypto investments have been witnessed.
It should be reiterated that we are continuously hearing positive news regarding cryptocurrency. Hence it’s a clear indication that now many countries think that this is the right time to make regulations regarding digital assets and legalize them. Superpowers like the USA will also introduce executive orders that show a potentially bright future of crypto.
Do you think that Crypto is the future or not? Share your worthy opinions in the comments section.