Earlier this week, India had announced its plans for a digital currency that will launch next year. It even proposed taxing virtual assets like cryptocurrency and NFT, as it prepares to recognize digital currencies as a legal tender.
According to finance minister Nirmala Sitharaman (Via TechCrunch), the Indian government is proposing a 30 percent tax on income from the transfer of virtual assets. She further added that 1 percent tax should be deducted at source on payments made to purchase digital assets. Sitharaman said that “No deduction in respect of any expenditure or allowance shall be allowed while computing such income except cost of acquisition. Further, loss from transfer of digital asset cannot be set off against any other income. Gift of virtual digital asset is also proposed to be taxed at the hand of the recipient.”
The news arrives as the nation paves the way for cryptocurrencies and NFTs, although, government regulations on these assets are still uncertain. Notably, India’s central bank is planning on a new digital currency that is set to be released sometime next year. Its already began testing, which will go on for several months as the nation analyses its impact on the banking and monetary systems. Apart from just offering some clarity over taxing on digital assets, this news also showcases a rather progressive outlook from the Indian government since it is legalizing cryptoassets.
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