India took a bold step today towards adopting cryptocurrencies after years of deliberations, as the south Asian country with big population of crypto traders announced moves to legalise digital assests with a proposal to place 30% tax on cryptos and NFTs sales, India also reveals plans to float digital Rupees.
“Any income from virtual digital assets is taxable at 30 per cent,” the finance minister said while presenting the federal budget. “There will be no deduction with exception of the cost of acquisition. The TDS is applicable beyond a specified monetary threshold, and the gift of virtual currencies is taxable in the hands of the recipient.”
In order to capture the transaction details, the government has also provided for TDS on payment made in relation to transfer of virtual digital asset at the rate of 1 per cent of such consideration above a monetary threshold. Gifting of virtual digital asset is also proposed to be taxed in the hands of the recipient.
In her Union Budget 2022 announcement, finance minister Nirmala Sitharaman also said that the country’s central bank, the Reserve Bank of India (RBI), will introduce a digital currency in the next financial year using blockchain and other needed technology.
“Introduction of a central bank digital currency will give a big boost to the digital economy,” Nirmala Sitharaman said on Tuesday while presenting the federal budget. “Digital currency will also lead to a more efficient and cheaper currency management system.”
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