India Crypto Tax news: The Indian crypto ecosystem is desperately looking for respite in the harsh tax policy that was introduced in 2022. Although the Indian administration appears to be open to blockchain based innovation, its reluctance to allow cryptocurrency transactions at scale is still intact. As early as December 2022, the governor of India’s central bank reaffirmed his skepticism on crypto implementation in the country’s economy. On the flip side, the country recently implemented the e-Rupee, which is the electronic version of India’s Rupee but not based on blockchain.
Also Read: Budget 2023 India Date: Tax Benefits For Salaried, Improved Crypto Tax Structure; 7 Key Points
With the government set to present the data from the Economic Survey on January 31. In the last two economic surveys, there was no mention of cryptocurrencies or the potential use cases. However, in the economic survey 2020-21, there was a mention of blockchain based security protocols. This time around, after the implementation of the e-Rupee project and the government’s positive hints about potential web 3.0 adoption, the report could perhaps discuss the roadmap.
On February 2, 2022, the second day of the budget session, the government announced its decision to impose taxes on crypto trade. This time, the government could make a comprehensive comment on the information technology and finance industry on February 1, 2023.
The India Crypto Tax Scenario
Just a few months back, India’s finance minister Nirmala Sitharaman encouraged the country’s accounting industry professionals to explore emerging technologies like blockchain. She said that web 3.0 would change the way financial information is handled. This came out as the government’s hint of acceptance to web 3.0 use cases, while discouraging excessive crypto transactions in the mainstream economy. Traditionally, the government cited security and operational reasons for its resistance to crypto use in India.
As a result, the government imposed a 30% tax on all profits made from virtual digital assets (VDAs) while not leaving scope for offsetting losses made in other VDAs. Also, investment in VDAs of over Rs. 10,000 per year attracts a 1% tax deductible at source (TDS). On both these fronts, the average Indian taxpayer is hoping for a revision and some respite in the form of tax cuts.
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