Presenting the Union Budget 2022-23 in the Lok Sabha, Sitharaman said gifts received in the form of cryptocurrencies will also be taxed at the same rate.
Cryptocurrencies gifts will be taxed at the receiver’s end. However, losses from sale of digital assets cannot be offset against other income, she added.
“I propose to provide that any income from transfer of any virtual digital asset shall be taxed at the rate of 30 per cent. No deduction in respect of any expenditure or allowance shall be allowed while computing such income, except the cost of acquisition,” Sitharaman said. The tax proposals will come into effect from April 1 after the passage of the Union Budget in Parliament.
Sitharaman also said Reserve Bank of India will introduce a digital currency in the next financial year using blockchain and other supporting technology.
“Introduction of a central bank digital currency will give a big boost to digital economy. Digital currency will also lead to a more efficient and cheaper currency management system,” Nirmala Sitharaman said on Tuesday while presenting the Budget for FY23.
RBI has voiced “serious concerns” around private cryptocurrencies on the grounds that these may cause financial instability.
Industry estimates suggest there are 15 million to 20 million crypto investors in India, with total crypto holdings of around Rs 40,000 crore. No official data is available on the size of the Indian crypto market.
Experts said the 30% tax levied on income arising from the sale of cryptocurrency is similar to the tax rate on winnings from lottery, game shows, puzzles etc.
Digital currency and assets like NFTs (non-fungible tokens) have gained traction globally over the last couple of years. Trading in these assets has increased manifold with cryptocurrency exchanges being launched. However, India did not have a clear policy on either regulating or taxing such asset classes.
NFTs are unique digital assets with verified ownership rights and the details are stored on a blockchain.
Nangia Andersen India Chairman Rakesh Nangia told PTI that the government has walked the talk on a stable and predictable tax regime and transfer of virtual digital assets have been brought under the taxation ambit.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
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