India’s finance minister (FM) Nirmala Sitharaman while announcing the Union Budget 2022 proposed to levy 30 per cent tax on income from crypto and digital assets.
The proposal came months after several reports claimed that India is intending to ban cryptocurrencies in the country
In her Budget speech on February 1, Sitharaman said, “There has been a phenomenal increase in transactions in virtual digital assets. The magnitude and frequency of these transactions have made it imperative to provide for a specific tax regime. Accordingly, for the taxation of virtual digital assets, I propose to provide that any income from transfer of any virtual digital asset (VDA) shall be taxed at the rate of 30 per cent.”
After presenting the budget, Sitharaman, at a press conference, said consultation is underway with stakeholders on digital assets, adding that there is no clarity yet on how the Government of India will regulate cryptocurrencies.
Ashish Singhal, Co-chair Blockchain and Crypto Assets Council (BACC), Founder and CEO, CoinSwitch in an exclusive interview with Reema Sharma of Zee Media shared his views on tax on VDA and the future of cryptos in the country.
FM Nirmala Sitharaman has categorically said that the term is ‘Crypto’ and not ‘Crypto-currency’ as being discussed in the common parlance. What is your view on it?
The industry also wants crypto to be classified as an asset class. The world is moving towards a decentralized future. Tech revolution and crypto-assets play a functional role in building the disruptive decentralized world, aka Web3.0. Regulation of crypto assets is of paramount importance as Indian citizens need to have access to crypto-assets in a safe and secure manner. Crypto is better used as an asset instead of currency, considering India already has faster payment systems like UPI.
In her Budget speech, the FM has said that income from virtual digital assets (VDA) will be taxed at 30%. How does the crypto biz interpret it?
We see this as a positive development overall. What it does is that it removes all ambiguity. And signals that the government recognizes this industry. Now there are more nuances to this. Which is: could we look at taxing this at par with other assets like securities. These nuances need to be worked out. The industry is hopeful that the government will work with the industry on some of these finer aspects.
The tax on VDA will be levied from 2023. How does it affect crypto investors this year?
We are still studying the fine print and would advise crypto investors to consult their CA’s.
FM has said the Reserve Bank of India is soon going to introduce a Digital Rupee. How can we understand Digital Rupee in light of Crypto and vice-versa?
We definitely see this as a positive step. Leads to a clear demarcation between the currency (legal tender) and other crypto assets. It addresses concerns about the stability of the monetary system while allowing cryptos and other digital assets to innovate.
India’s finance minister (FM) Nirmala Sitharaman while announcing the Union Budget 2022 proposed to levy 30 per cent tax on income from crypto and digital assets. The proposal came months after several reports claimed that India is intending to ban cryptocurrencies in the country In her Budget speech on February 1, Sitharaman said, “There has been a phenomenal increase in transactions in virtual digital assets. The magnitude and frequency of these transactions have made it imperative to provide for a specific tax regime. Accordingly, for the taxation of virtual digital assets, I propose to provide that any income from transfer of any virtual digital asset (VDA) shall be taxed at the rate of 30 per cent.” After presenting the budget, Sitharaman, at a press conference, said consultation is underway with stakeholders on digital assets, adding that there is no clarity yet on how the Government of India will regulate cryptocurrencies. Ashish Singhal, Co-chair Blockchain and Crypto Assets Council (BACC), Founder and CEO, CoinSwitch in an exclusive interview with Reema Sharma of Zee Media shared his views on tax on VDA and the future of cryptos in the country. FM Nirmala Sitharaman has categorically said that the term is ‘Crypto’ and not ‘Crypto-currency’ as being discussed in the common parlance. What is your view on it? The industry also wants crypto to be classified as an asset class. The world is moving towards a decentralized future. Tech revolution and crypto-assets play a functional role in building the disruptive decentralized world, aka Web3.0. Regulation of crypto assets is of paramount importance as Indian citizens need to have access to crypto-assets in a safe and secure manner. Crypto is better used as an asset instead of currency, considering India already has faster payment systems like UPI. In her Budget speech, the FM has said that income from virtual digital assets (VDA) will be taxed at 30%. How does the crypto biz interpret it? We see this as a positive development overall. What it does is that it removes all ambiguity. And signals that the government recognizes this industry. Now there are more nuances to this. Which is: could we look at taxing this at par with other assets like securities. These nuances need to be worked out. The industry is hopeful that the government will work with the industry on some of these finer aspects. The tax on VDA will be levied from 2023. How does it affect crypto investors this year? We are still studying the fine print and would advise crypto investors to consult their CA’s. FM has said the Reserve Bank of India is soon going to introduce a Digital Rupee. How can we understand Digital Rupee in light of Crypto and vice-versa? We definitely see this as a positive step. Leads to a clear demarcation between the currency (legal tender) and other crypto assets. It addresses concerns about the stability of the monetary system while allowing cryptos and other digital assets to innovate.