India to introduce 30% crypto tax, digital rupee CBDC by 2022-23
In a speech discussing the budget for 2022, Indian finance minister Nirmala Sitharaman announced the launch of a central bank digital currency (CBDC) by 2022-23 as means to boost the country’s economic growth.
Sitharaman highlighted the need for digital inclusion across numerous business verticals while announcing the fund allocation set in the Union Budget.
Speaking about the launch of a digital rupee, she added that the introduction of a CBDC will provide a “big boost” to the digital economy. She also highlighted the possibility of a more efficient and cheaper currency management system made possible by digital currencies.
“It is therefore proposed to introduce digital rupee using blockchain and other technologies to be issued by the Reserve Bank of India, starting 2022-23.”
Complementing the launch of a digital version of the Indian rupee, Sitaraman also proposed the introduction of a 30% crypto tax that targets all transfers of virtual digital assets. She suggested:
“Any income from transfer of any virtual digital asset shall be taxed at the rate of 30%. No deductions in respect of any expenditure or allowance shall be allowed while computing such income, except the cost of acquisition.”
— All India Radio News (@airnewsalerts) February 1, 2022
The finance minister also highlighted that any losses that occurred while transacting digital assets cannot be used as compensation against any other income source. In other words, investors will not be able to show losses or hacks of cryptocurrencies to offset taxation on profits.
In order to keep track of crypto investments in the country, Sitharaman further proposed to implement a tax deduction at source (TDS) of 1% above a yet-to-be-determined threshold.
Local Indian media publication Lok Sabha highlighted that a parliamentary research group has organized a crypto-focused training for tomorrow, Feb. 2.
As Cointelegraph pointed out, the legislative business calendar for the lower house of parliament no longer includes a bill that could potentially ban crypto in the country.
Previously, published texts of the bill propose banning “private cryptocurrencies” in India while retaining use of “the underlying technology of cryptocurrency.”