Indian Finance Minister Nirmala Sitharamanannounced its India Budget for 2022-23 today, along with two major announcements regarding cryptocurrencies.
For any income arising from the transfer of any virtual digital asset, the Minister a tax rate of 30% suggested.
“There has been an extraordinary increase in transactions in virtual digital assets. The size and frequency of these transactions necessitated the establishment of a certain tax regime.”
Reuters reports that there are currently between 15 and 20 million crypto investors in India, according to industry estimates. The aggregated crypto assets of Indian investors are around $5.37 billion. We can say that this great value brought taxation to the agenda as an inevitable development.
Besides, the Minister of Finance of India crypto- While announcing heavy taxes on profits from his trade, he said the losses could not be offset by any other income.
Another important announcement is a central bank digital currency (CBDC) came in regarding. Minister Sitharaman in his budget speech, blockchain and related technologies a digital rupeeSaid it would be removed.
“The digital rupee will be issued by RBI using blockchain and other technologies from 2022-2023. This will provide a huge boost to the economy.”
Overall, the industry has responded positively to the above announcements. Chief of WazirX Nischal Shettydescribed the developments as “great news” on Twitter.
Clarity on crypto tax as well!
Income from transfer of any digital asset to be taxed at 30%
No expenditure deduction except cost of acquisition
Loss from digital asset cannot be setoff
Yet another step towards positive crypto regulations 🚀🚀🚀#IndiaWantsCrypto
— Nischal (WazirX) ⚡️ (@NischalShetty) February 1, 2022
India’s announcement of the Digital Rupee and the introduction of crypto taxes means that investors can freely participate in the crypto market without fear of absolute ban. This could lead to greater liquidity and engagement from Indian investors. But this 30% tax could also act as a major deterrent for retail investors.