JB Mohapatra, the chairman of the Central Board of Direct Taxes (CBDT), has revealed the date of the proposed taxation on cryptocurrency and other virtual assets in India.
According to a report in The Times of India, the 30% taxation on revenue from crypto assets will be effective starting from April 1st. Similarly, the 1% tax deducted at source (TDS) on transactions relating to these asset classes will commence on July 1st.
India Imposes Taxes on Crypto Revenues
India is one of the many countries that has experienced massive crypto adoption since the 2020 crypto boom, prompting the nation’s regulators to propose taxes on crypto assets, including non-fungible tokens (NFTs) as a way to regulate the use of cryptocurrencies.
The crypto tax bill was proposed by the country’s finance minister Nirmala Sitharaman during her 2022 – 2022 union budget. The bill proposed that crypto traders will have to pay a 30% tax on crypto revenues and 1% TDS on transactions involving crypto and other digital assets.
“There has been a phenomenal increase in transactions of 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%,” Sitharaman said.
India to Launch CBDC This Year
Meanwhile, as India plans to regulate crypto transactions through taxes, the country may likely launch a central bank digital currency (CBDC) later this year.
Earlier this week, Sitharaman revealed during the India Global Forum that the Reserve Bank of India (RBI) would join the list of countries to launch a CBDC before the end of 2022.
“In this day and age, bulk payments happening between countries, large transactions between institutions, large transactions between central banks themselves of each country are all better enabled with a digital currency. So we think the RBI would be looking to see how best they can come out with it,” Sitharaman stated.
When queried about the status of crypto regulation in the country, she stated that consultations are now taking place and anyone who is interested in the crypto market is welcome to join.
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