By FintechNews staff
The Indian government has proposed taxing income from cryptocurrencies and other digital assets at 30%. India’s finance minister, Nirmala Sitharaman, said: “There’s been a phenomenal increase in transaction in virtual digital assets … The magnitude and frequency of these transactions have made it imperative to provide for a specific tax regime.”
The levy on cryptocurrency will also apply to non-fungible tokens (NFTs) and gifts, where the recipient will be taxed.
Taxing crypto may signal that the government is moving towards regulation over an all-out ban.
The 30% levy on crypto is double that of the 15% capital gains tax on short-term gains, which applies to appreciating assets like stocks and shares.
In her speech, the minister also announced that long-term capital gains would remain unchanged at a 15% cap.
“No deduction in respect of any expenditure or allowance shall be allowed while computing such income except cost of acquisition. Further, loss from transfer of digital asset cannot be set off against any other income,” she said in one of New Delhi’s most remarkable tech and business-focused federal budgets. “Gift of virtual digital asset is also proposed to be taxed at the hand of the recipient.”
The proposal comes at a time when the purchase of cryptocurrencies and NFTs are quickly making inroads in India despite regulatory uncertainty in the nation.
India’s central bank will also introduce a digital currency in the next financial year, she said. The nation’s central bank has been testing its CBDC through a number of controlled trials for several months in the country and has been examining its impact on the banking and monetary systems.
“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,” she said. In a press note, New Delhi said its digital currency Central Bank will be treated as bank notes.