On February 2, Nirmala Sitharaman, India’s Finance Minister presented the federal budget 2022, where they imposed 30% tax on cryptocurrencies and other digital assets like NFTs. Sitharaman also announced the launch of a central bank digital currency (CBDC) by 2022-23 as means to boost the country’s economic growth.
“There has been a phenomenal increase in virtual digital assets. The magnitude and frequency of these transactions have made it imperative to provide a specific tax regime. Accordingly, for the taxation of virtual digital assets, I propose that any income from the transfer of any virtual digital asset shall be taxed at the rate of 30%,” said the Finance Minister during her Budget speech in the Lok Sabha.
Since then, there has been a pushback against the 30% crypto tax (This is by far the highest tax band in the country) in the nation, prompting the creation of a petition by indian crypto investor on Change.org titled “Government of India: Introduce Reasonable Crypto Tax Policies.“
Aditya Singh, a YouTuber and crypto influencer started the petition, wanted to bring it to the notice of Prime Minister Narendra Modi and Finance Minister Nirmala Sitharaman. Notably, nearly 60,000 signatures, the petition has become one of the most popular on Change.org, but what’s more astonishing is the petition’s rapid growth, the petition reached over 15,000 signatures only in 3 hours.
Aditya Singh set out a few demands in the petition. These include:
- Stop treating the crypto industry the same as gambling. The argument is that crypto doesn’t include just speculation, but also applications based on the underlying technology.
- Bring down the proposed tax rates from 20% to be more in line with Section 111A and Section 112A of the Income Tax Act, 1961. These acts propose taxes on the transfer of capital assets.
- To impose TDS (tax deducted at source) at 1% on the sale of crypto assets or implement statements of financial transactions (SFTs) in line with extant capital markets
- Include exchange fees, blockchain network fees, interest payment, and royalty payments on NFTs etc. in the calculated cost of acquisition
- To allow setting off and carrying forward of losses.
Indian officials stated on Tuesday that they want to levy taxes on crypto revenue, making India large nation to move quickly toward legalizing and regulating crypto. The government also wants to introduce its own blockchain-based currency, the digital rupee, which would be managed by the Reserve Bank of India (RBI) by April 2023.
The planned tax comes at a time when the acquisition of crypto and NFTs is rapidly growing in India, despite the fact that the country is still dealing with regulatory ambiguity.
- No crypto ban in India – SEBI will regulate the sector
- Indian Finance Minister Says Monitoring Crypto Ads; Not Weighing Ban
- India has highest number of crypto owners in the world at 100 million
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