India begins the 30% tax on Crypto and Digital assets proposed by Finance Minister Nirmala Sitharman in the 2022 Union Budget. Starting April 1 this year, cryptocurrency and virtual assets earnings In India will pay 30% tax, Central Board of Direct Taxes (CBDT) chairman JB Mohapatra said.
The government approved the tax and is set for implementation on April 1, while the 1% tax-deductible at source (TDS) is pushed back to July 1.
India is one of the countries to impose a tax on digital assets such as Cryptocurrencies, Non-Fungible Tokens (NFTs). At the same time, it did not make provisions for losses suffered from being offset by any other means/ income.
The Minister said the Ministry would impose the tax measure on digital assets composed primarily of cryptocurrencies, including NFTs, which have become popular in India. Trading in these assets has significantly increased with Cryptocurrency Exchanges launched.
Again, She posits further, “No deduction in respect of any expenditure or allowance shall be allowed while computing such income except the acquisition cost,” late January, she also said, “Further, loss from the transfer of virtual digital assets cannot be set off against any other income.”
Moreover, the CBDT chairman, while explaining the reasons for the 1% TDS tax, a form of income tax coming on board on July 1, said that Today’s income tax collection of Rs 13.63 lakh crore is expected to rise further till March 30. Our gross & net collections in the last five years and the history of the tax department are optimal. Our gross numbers have crossed Rs 15 lakh, which we could never touch earlier,”
The CBDT chief made the state as he explained that the government net tax collections rose 48.4% annually to Rs 13.63 lakh crore, the highest volume since 2018-19.
Before the above, India never had a clear-cut policy on dealing with this asset class, outright banning, taxing, or regulating them.
The opinion on what this portends for the future of Crypto in India is divided. Some see it as a better alternative to outright ban as is obtainable in some countries. In contrast, others see it as an inhibition to the growth of Crypto in India and ultimately will boomerang back on the government as it stifles the still fledgling Crypto Industry in India.
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