- All digital asset transactions would be subject to a 1% TDS.
- The Reserve Bank of India will introduce a digital rupee this year.
Sources have long maintained that cryptocurrencies would be deemed digital assets, which Finance Minister, Nirmala Sitharaman, appeared to affirm today. Even though the government has not yet specified whether and how cryptocurrencies will be authorized. Digital asset income would be taxed at a rate of 30 percent, Ms. Sitharaman stated during the Budget presentation in Parliament during her speech.
The finance minister said:
“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.”
Digital Rupee Powered by Blockchain Technology
However, the Modi government is currently drafting legislation to tax cryptocurrency use after first stating intentions to abolish them. When dealing in virtual digital assets, losses cannot be offset against other sources of income.
Furthermore, if one sends someone cryptocurrencies as a gift, they are responsible for paying any applicable taxes. From now on, all digital asset transactions would be subject to a 1% TDS (tax deducted at source), according to Ms. Sitharaman.
There are “serious concerns” regarding private cryptocurrencies, according to the Reserve Bank of India (RBI). According to India’s Finance Minister, the Reserve Bank of India will introduce a digital rupee powered by blockchain technology this year.
According to industry estimates, approximately $5.29 billion in cryptocurrencies is now held by 15 to 20 million Indian investors. On the other side, the crypto market has been rebounding, with many coins turning green after a long fall.
