Today, the Indian government announced Union Budget 2022. The budget has imposed a 30% tax on any income from the transfer of virtual digital assets. No deductions and exemptions will be allowed. Virtual digital assets also include cryptocurrency and NFT. So, Indian people will also have to pay a 30% tax on any profit earned through cryptocurrency trading and NFTs.
“Any income from virtual digital assets is taxable at 30 percent,” 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.”
The finance minister further clarified that no loss in the transaction will be allowed to be carried forward.
This proposal has come at a time when cryptocurrencies and NFTs are getting adoption in the country. Teens are also now taking interest in cryptocurrency trading and people have started selling NFTs to earn big online.
Now when cryptocurrencies are taxable, several people are asking if the government is ready to accept cryptocurrency. I think cryptocurrencies are being treated as virtual assets and the government has yet to recognize them as a currency or a legal tender. Private cryptocurrencies are still not safe to approve as legal tender because of high volatility. Even if cryptocurrencies are not controlled by any government or banking system, big investors can easily manipulate prices by investing or selling.
India’s central bank Reserve Bank of India will also introduce a digital currency in the next financial year. As of now the central bank has been testing it for several months and is trying to understand its impact on the banking system
