Indian government proposes 30% tax on cryptocurrency and NFT trading income

India on Tuesday proposed to launch a digital rupee by next year and levy a 30% tax on income from transfers of virtual digital assets such as cryptocurrencies and NFTs, the most high-profile technology and business-focused federal budget revenue plan submitted by New Delhi one.

India is also proposing a 1 percent at-source tax on payments related to the purchase of virtual assets in order to keep track of the details of all cryptocurrency transactions, Finance Minister Nirmala Sitharaman said on Tuesday.

"In calculating this income, no expenses or allowances are allowed to be deducted except for the cost of the acquisition. Furthermore, the loss of the transfer of digital assets cannot be offset against any other income," she said. "Gifts of virtual digital assets are also proposed to be taxed in the hands of the recipient."

At the time of the proposal, the purchase of cryptocurrencies and NFT transactions were rapidly gaining ground in India despite regulatory uncertainty in India. Binance-owned WazirX said last month that annual trading volume on its platform exceeded $43 billion in 2021, an increase of "1735%" from 2020.

The rise in popularity of crypto tokens has also inspired a wave of startups looking to innovate in the space. Andreessen Horowitz made its first investment in India last year by backing cryptocurrency exchange CoinSwitch Kuber.

"The scale and frequency of these transactions necessitates that we dictate a specific tax regime," Sitharaman said. "The introduction of a central bank digital currency will give a big boost to the digital economy. Digital currency will also lead to a more efficient and cheaper money management system." She Said that the RBI will also launch a digital currency in the next financial year. The country’s central bank has been testing its CBDC in a number of controlled trials at home for several months and has been studying its impact on the banking and monetary system.

Income The Indian government’s proposal today has in some ways created more confusion for entrepreneurs, venture capitalists and ordinary people about what New Delhi plans to do with cryptocurrencies. By introducing a tax regime for cryptocurrency-related transactions, New Delhi appears to be either acknowledging the virtual asset as a form of legal tender, or, as one investor loudly asked, is merely "cutting a piece of meat out of all the action."

New Delhi has also pledged to open up defence R&D to start-ups and push to increase the reach of internet and digital banks in rural areas of the country.

Disclaimer: As a blockchain information platform, the information provided on this site does not represent any investment suggestion. The articles published on this site only represent personal opinions and have nothing to do with the official position of Mars Finance. Virtual currency does not have the same legal status as legal tender, and there are legal risks involved in virtual currency investment transactions. Mars Finance opposes all kinds of token hype, and investors are requested to view market risks rationally.