INSUBCONTINENT EXCLUSIVE:
Many see government's announcement as an acknowledgment of crypto industry as emerging asset classAfter a long wait and mixed signals over
the past two years, there has been some clarity on the taxation of income from cryptocurrency
Presenting the Union Budget on February 1, finance minister Nirmala Sitharaman announced that income from digital asset transfer will invite
tax at the rate of 30 per cent
She made clear that no deductions or exemptions, except the cost of acquisition, will be allowed
She also said that crypto gifts will be taxed at the same rate on the side of the receiver
This brought a big clarity to those trading in the emerging industry
Hitherto, they are unsure how their income from crypto trading would be taxed.What are digital assets?While the government did not
announcement as an acknowledgment of the crypto industry as an emerging asset class
The Reserve Bank of India (RBI) previously made clear its dislike of private virtual currencies such as Bitcoin, Ethereum, and others
It said it is working on its own central bank digital currency and will launch after due diligence
The finance minister in her Budget speech said the RBI digital currency would be launched this year
However, some appear worried about the steep rate of tax
They say this move is aimed at discouraging investors and reducing the appeal of cryptocurrencies.How will the tax be calculated?The new
taxation regime will come into effect from April 1 after the passage of the union budget in Parliament
The finance minister said there will also be 1 per cent TDS on cryptocurrency transactions
Any loss incurred as a result of the transfer of virtual digital assets cannot be offset against other sources of income.If you have
invested Rs 1,000 in a cryptocurrency and then sold that coin for Rs 1,500, you don't have to pay 30 per cent tax on the total amount
It only means that the government recognises cryptocurrency as an asset class and will monitor crypto transactions from now on.
