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India proposes 30% tax on crypto and NFTs income – TechCrunch

India on Tuesday proposed introducing a digital rupee and a 30% tax on revenue from the transfer of virtual digital assets such as cryptocurrencies and NFTs by next year in one of the most notable tech- and business-focused federal budgets unveiled by New Delhi.

India has also proposed a 1% withholding tax on payments related to the purchase of virtual assets to capture details of all such transactions, the country’s Finance Minister Nirmala Sitharaman said on Tuesday.

“In calculating this income, no deduction shall be allowed in respect of expenses or allowances other than acquisition cost. In addition, the loss from the transfer of digital assets cannot be offset against other income,” she said. “It is also proposed that the gift of a virtual digital asset is taxed on the part of the recipient.”

The proposal comes at a time when buying cryptocurrencies and NFTs in India is fast taking off, despite regulatory uncertainty in the country. Binance-owned WazirX said last month that annual trading volume on its platform exceeded $43 billion in 2021, representing “1,735%” growth from 2020. A16z did it Initial investment in India last year by supporting cryptocurrency exchange CoinSwitch Kuber.

“The scale and frequency of these transactions have made it imperative to provide for a specific tax regime,” she said.

India’s central bank will also launch a digital currency in the next fiscal year, she said. The country’s central bank has been testing its CBDC in various trials across the country for several months, studying its impact on the banking and monetary system.

“The launch of a digital central bank currency will give the digital economy a big boost. Digital currency will also lead to a more efficient and cheaper currency management system,” she said.

Today’s proposals have created a little more confusion among entrepreneurs, venture capitalists and the general public about how New Delhi intends to deal with cryptocurrencies. By introducing a tax regime for crypto-related transactions, New Delhi appears to either recognize such virtual assets as legal tender or, as one investor loudly wondered, “take their pound of flesh out of the whole action.”

The Indian government proposed a new tax policy for virtual digital assets.

– Has the government legitimized cryptocurrencies? Or is this a way to take her pound of flesh out of all the action?

– Will this push Indian banks to partner with crypto startups?

— Osborne Saldanha (@os7borne) February 1, 2022

New Delhi also vowed to open up its defenses’ research and development to startups and pushed to increase the reach of internet and digital banks in rural parts of the country.

This is an evolving story. Continue…

India proposes 30% tax on crypto and NFTs income – TechCrunch Source link India proposes 30% tax on crypto and NFTs income – TechCrunch