India Set to Introduce Digital Rupee, Slaps 30 Percent Tax on Crypto
India has now implemented a 30 percent capital gains tax on bitcoin (BTC) and other cryptocurrencies. Finance minister Nirmala Sitharaman has also revealed that the nation will launch its blockchain-based central bank digital currency (CBDC) by Q1, 2023.
Fresh Bitcoin Capital Gains Tax
India, like most countries on the Asian continent, is coy about the use of bitcoin and other cryptocurrencies, with some jurisdictions, including China, Bangladesh, Qatar, and a host of others already implementing a blanket ban on all forms of crypto-related activities.
However, unlike its Chinese neighbors, it appears India has chosen to regulate its fledgeling cryptospace rather than completely outlawing cryptoassets within its shores.
In the latest development, finance minister Nirmala Sitharaman has announced that crypto traders will now be subjected to a 30 percent capital gains tax. The 63-year-old minister made the statement during the presentation of the country’s 2022 budget in parliament.
It’s worth noting that Indian authorities, including the Reserve Bank of India (RBI) have always exhibited a draconian stance towards crypto and as such, the hefty 30 percent tax on the profits of bitcoiners, now appears to be a breakthrough for crypto enthusiasts.
Speaking on the new direction and focus of the ministry towards the development of a digital economy, the minister 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 tax regime.”
Speaking further on taxation without clear-cut regulatory guidelines for market participants, the minister said:
“We have circulated a paper, inputs are coming in, public stakeholders are coming in so regulation goes through that process. I don’t wait till regulation comes into place taxing people who are earning profits. Can I?”.
Drive Towards a Digital Economy
The latest announcement by the ministry of finance is coming on the heels of a bill presented on the floor of the Indian Parliament seeking to outrightly ban the use of cryptocurrency in the country.
With the latest announcement, crypto experts and stakeholders in India are optimistic about the future of cryptocurrency in the country.
The CEO of one of the leading crypto exchanges WazirX, Nischal Shetty says he firmly believes that the latest introduction of crypto taxation will lay a strong foundation for the nation to officially legalize bitcoin and other digital currencies.
In the same vein, Shetty reiterated that the introduction of the digital rupee is a welcome development as it will pave the way for the adoption of cryptocurrency in the country and also provide much-needed recognition to India’s crypto industry.
Even at that, not everyone is happy with the way things are panning out and some have argued that the 30 percent tax may be a heavy burden for Indians to bear.
“There might be movement in people liquidating their crypto portfolios and moving to the equity market. The 30 Percent tax is too much,” an anonymous source told Coindesk.
Elsewhere, former Russian Prime Minister, Dmitry Medvedev, has warned the government against banning crypto in the nation, stating categorically that the move could be counterproductive.
At the time of writing, bitcoin (BTC) is trading around $38,426, with a market cap of $728 million, according to CoinMarketCap.
