One more country established clear legal framework for digital assets operations and taxation
The Indian government just proposed tax regulations for crypto: digital assets will be taxed with a 30% income tax; a Rupee-pegged CBDC will go live in the upcoming fiscal year.
Crypto now regulated and taxed in India
In her budget speech on Feb. 1, 2022, Indian Finance Minister Nirmala Sitharaman released a plan to introduce digital assets regulation. Income from crypto transfers will be taxed at 30%.
Crypto just became legal in India, with a 30% tax on income from sale of digital assets https://t.co/u0qmwJpMd9 #Budget2022 pic.twitter.com/zClfT7G0rT
— Bloomberg (@business) February 1, 2022
Also, the Digital Rupee will go live in fiscal year 2022-2023 (starts in April).
Losses from cryptocurrency operations cannot be set off against any other gains, the proposal says. Gifts in crypto will be taxed in the hands of the recipient.
Per Bloomberg, the Indian FM admitted that crypto market adoption should not be ignored anymore:
There’s been a phenomenal increase in transaction in virtual digital assets. The magnitude and frequency of these transactions have made it imperative to provide for a specific tax regime.
Community hails the proposal: “Yet another step”
Although the income tax looks really high, major players in the Indian digital assets market are optimistic about the effects new regulations are set to have on the segment.
Nischal Shetty, CEO and founder of the largest Indian cryptocurrency exchange, WazirX (WRX), which is wholly owned by Binance (BNB) since 2019, stresses that this is a massive step for the sphere:
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
Thus, the proposal will most likely put an end to all speculation about a China-style cryptocurrency ban in India. Previously, Indian officials discussed the prohibition of private cryptocurrencies and a 10-year jail term for accepting crypto as payment tools.