30% tax on digital asset income in India
Recently in India’s Union Budget 2022-23 it has been proposed that income from digital assets will now be taxed at 30 percent in India.
This tax will be taxed at the rate of 30 per cent on any income from virtual digital assets (including crypto-currencies).
The rate of tax at source (TDS) will be 1 per cent on payments made for transfer of digital assets.
Any loss arising from such transaction cannot be set off against any other profit.
Those who accept gifts in the form of virtual currency will also have to pay tax.
- It will be ensured that persons engaged in transactions of crypto-currencies will also have to pay tax.
- The announcement could stem increasing transactions despite the Reserve Bank of India’s warnings about the risks of money laundering, terrorist financing and price volatility.
- Currently, there are around 15 million to 20 million crypto investors in India. Their total crypto holding is around Rs 40,000 crore.
- Crypto-currencies will be treated as assets and not as currencies. Also, a ‘Central Bank Digital Currency’ (CBDC) backed by the Reserve Bank of India will also be introduced by the year 2023.
- CBDC will be a legal tender. It will be issued in digital form by the central bank.
- It is similar to fiat currency (such as Indian Rupee or US Dollar). It can be transacted with fiat currency.
Source – The Hindu