Crypto traders in India are now subject to tax obligations. The country also plans to launch its own digital currency.
The Indian Government has imposed a 30% tax on income from the transfer of crypto assets, the country’s Finance Minister Nirmala Sitaraman revealed during her 2022-2023 budget speech today. She said,
There has 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… I propose to provide that any income from transfer of any virtual digital asset shall be taxed at a rate of 30%.
She noted that there will be no tax deduction for crypto gains for taxpayers in the country, and losses from crypto cannot be set off against other income. In addition, any gift given in crypto assets will be taxed “in the hands of the recipient.”
In order to trace the transfer of digital assets, the government will levy a 1% tax deductible at source (TDS) on transfer of crypto assets.
During her speech, the Minister also stated that there is a possibility of the country launching its central bank digital currency (CBDC) in 2022-2023. Sitaraman added that CBDC will bring about “a big boost to the digital economy,” adding that the currency will be issued “using blockchain and other technologies.”
No Crypto Ban in India
Over the years, Indian regulators have proposed several bills banning the use of digital assets in the country.
It is worth noting that in the ongoing budget speech section, a bill to ban crypto is not included in the menu. Indian regulators levying a tax on crypto income means that it is not banning digital assets, but rather the emerging asset class has become legal in the country.
Meanwhile, regulators imposing taxes on crypto has been a trend in recent times. Just recently, Thailand declared that all crypto traders in the country are subject to 15% capital gain tax. However, the Southeast Asian nation withdrew its plans following backlash from investors.
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