FINANCE MINISTER ANNOUNCES 30 % TAXES ON INCOME DERIVED FROM VIRTUAL DIGITAL ASSETS
In Budget 2022-23 Finance Minister Nirmala Sitharaman announces 30% of taxes on income derived from virtual digital assets. It means that cryptocurrency will also fall in net of taxes just like other debts and equities and there will be no deduction and exemption will be allowed, said Nirmala Sitharaman. Nirmala Sitharaman said that ‘’Any income derived from virtual digital assets is taxable at 30 % and there will be no deduction on exemption of cost of acquisition, Tax deduction system applicable beyond the specified monetary threshold, gift of virtual currencies taxable in the hands of receipts said the finance minister.
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| FINANCE MINISTER ANNOUNCES 30 % TAXES ON INCOME DERIVED FROM VIRTUAL DIGITAL ASSETS |
Virtual digital assets are any information, coin, or code generated through cryptographic means or otherwise, or providing a digital representation of value exchanged with or without consideration with promise or representation of having inherent value function as the stone of value or unit of account including its use in investment, besides, a nonfungible token or any other token of similar nature by whatever name called will also be classified as digital assets. Reserve bank of India will be going to introduce virtual digital currency in the next coming financial year and the introduction of this currency will give a boost to the digital economy and will create a cheaper and more efficient currency management system said Nirmala Sitharaman.
In India today we have 15 to 20 million crypto investors and crypto holdings are around 40,000 crores. In India, trading and investment in cryptocurrency and non-fungible tokens have boomed since the introduction of the crypto market. But even after its huge popularity, the government does not have a proper tax regulation policy to regulate the crypto market. The Modi government has been trying to regulate the crypto market with tax policy for the past few months. Reacting to this announcement Sundar Ranjan TK partner at DVS Advisors LLP said that clarity on the tax of digital assets is long overdue and was expected to be provided this year. The announcement of a tax at 30 percent on digital assets, coupled with the government launching its digital currency is an indicator that the government intended to discourage the same.