Amidst all the ‘noises’ surrounding crypto in the Indian subcontinent, the government has finally announced some decisions regarding the technology. Moreover, in its annual budget session today, the government has introduced a 30% on crypto assets.
The Finance Minister of the country, Nirmala Sitharaman, introduced this during her budget speech. Besides introducing a 30% on all crypto assets, the government also introduced an additional 1% TDS (Tax Deduction at Source) on all crypto-asset transactions.
For those who don’t know, TDS is a means of collecting tax on income, dividends, and assets before the payer transfer it to the payee.
Finance Minister also talked about the introduction of the Digital Rupee, which is the country’s own implementation of a CBDC. The Reserve Bank of India (RBI) will issue this CBDC in the year 2022-23.
While the cryptocurrency bill is not introduced in the legislation, the Indian government has laid out taxation for crypto assets.
Other than this, the budget session included the introduction of a new Income Tax platform for depositing returns, a new e-Passport with digital chips, reduction in corporate surcharges and taxation on Long Term Capital Gains.
Although the rate of tax for crypto assets is a bit too high, introducing it shows an intent of legalization. Moreover, with the introduction of Digital Rupee, India will also compete with other countries in the race of CBDCs.
Furthermore, the crypto community is silently optimistic that the government will have a layered approach to the technology. This is especially important considering that crypto in India is growing at a fair pace. Moreover, it can become a good source of revenue for the government besides easing trouble for traders/investors.