This proposed taxation effectively brings cryptoinvestors under the tax net
Union Finance Minister Nirmala Sitharaman on February 1, during her Budget speech declared that income from any virtual or digital assets will be taxed at 30%, at the receiver’s end.
She made it clear that there will be no deductions or exemptions and any loss incurred from transfer of digital assets cannot be set off against income.
Further, there will be a 1% TDS (tax deductible at source) on such transactions.
This proposed taxation effectively brings cryptoinvestors under the tax net. Cryptocurrencies are not a legal tender in India and the country does not have a legislation on digital currency yet.
However, another announcement made by Ms. Sitharaman on introduction of digital rupee has set off speculation that the Government and the Reserve Bank of India may consider cryptocurrencies as an asset.
In November last year, the Government planned to introduce a bill to regulate cryptocurrency and ostensibly ban all private cryptocurrencies. However, it is yet to be approved by the Union Cabinet.
A liberal estimate suggests that as many as 10 crore Indians may already have investments exceeding a total of $10 million in them.
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