Crypto-related confusion in Budget 2022. India has taken its first concrete steps in acknowledging crypto giving both excitement and confusion over whether the country is approving crypto as an asset.
During budget 2022, India’s Finance Minister Nirmala Sitharaman made two major announcements while introducing the nation’s budget for the upcoming.
●First, the government intends to levy a 30% tax on any income generated from crypto transactions and the second tax of 1% at source on all transactions (TDS).
●Second, India intends to introduce a digital rupee (a central bank digital currency, or CBDC) within the financial year, the first reference to a time frame.
Crypto Rules in India
The loss arising from the sale of any virtual assets cannot be set off against any other income. A TDS of 1 percent will be levied on payments made on transfer of the digital assets.
If you gift cryptocurrencies or any other virtual digital asset, it will be taxed at the same rate at the hands of the recipient.
Atharva Sabnis ‘s statement
Atharva Sabnis, member of Blockchain and Crypto Assets Council (BACC) said, “The bill provides for the definition of virtual digital asset, which is broad enough to cover emerging digital assets including NFT, assets in the metaverse, digital currencies, tokens, etc. Basically, any information or code or number or token not being Indian currency or foreign currency is generated through cryptographic means.”
Confusion Among Indians
The point of confusion for users after the announcement is how crypto could be taxed and yet not be legal. The government has refrained from suggesting crypto was legal. That is the major point why Indians are concerned about this crypto controversy.
However, after declaring the budget, the finance minister held a media briefing where she said her agency is “collecting inputs on regulation for crypto assets…I don’t wait till regulation comes in for taxing people who are making profits.”
People and media are still left with a lot of questions like, whether crypto is legal, how much citizens have to pay in taxes, whether the digital currency could still be banned and how non-fungible tokens (NFT) fit into India’s regulatory framework.
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