Today, on 1st February 2022, the Finance Minister of India Mrs. Nirmala Sitharaman, addressed the nation about digital rupees implementation by next year. The financial budget proposes to charge a 30% tax on the income generated by selling cryptocurrencies and NFTs. Thus, it become very important for the Indian Government to lay a foundation in their system for ‘Blockchain Technology’.
India has put forward a tax deduction on the payments received by selling and trading virtual digital assets on global cryptocurrency exchange platforms. At the same time, a 30% tax deduction has been proposed by the finance minister on Tuesday. As per the law, considering Section 2(14) of the Income Tax Act 1961, cryptocurrencies can be judged capital assets if procured by taxpayers for investment purposes.
As we all know, blockchain technology is making its way into every commercial market globally and gaining traction in every industry. Indian Government is looking into ways how to enforce crypto exchange without harming banking interests. Binance, the parent company of India’s largest cryptocurrency exchange WazirX, recorded $43 billion of trading volume in 2021. It is almost 1,735 % growth from the year 2020, as reported by Binance in 2021. Consequently, with such large whooping amounts, the crypto world is certainly getting attention from Indian banks and finance sectors.
“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,”By Finance Minister, Nirmala Sitharaman, India
It is very likely by the Govt to introduce blockchain-based and RBI-backed Central Bank Digital Currency (CDBC) by 2023.
In the meantime, with the introduction of TDS on crypto trading, the Government will be able to monitor better the transactions. The Banks can now work to establish new product models based on digital cryptocurrency for the Indian market. What is your opinion on the above matter? Share your feedback in the comment section below.