Cryptocurrency Taxed in India

[Yugocean]

The Indian government may not have clarified its stand on cryptocurrencies directly, but on February 1, 2022, the Finance Minister made it vaguely clear in the Union Budget when it taxed like maniac without providing any information.

The finance minister Nirmala Sitharaman used the term "digital asset" without naming cryptocurrencies, and levied taxes on it.
30% tax on profit; 1% tax on transactions, gift tax on receiving them as gift.
The way taxes are imposed, it also seems that the government lacks basic knowledge about blockchain technology.

Apart from this, the Reserve bank (central bank) of India is also allowed the issuance of its own digital currency. For the time being, the effect of taxes is going to be on that CBDC more, as there will be no clarification on decentralized or international currency.

The announcement has been welcomed by the cryptocurrency industry, as it eliminates the possibility of a ban, but investors have described it as a process of disorderly looting.​

 

[arunima25]

Yes, it is definitely seen as a possibility that sooner or later cryptocurrency might get legalised in India. And taxation might be a step in that direction. But until and unless the government comes out clearly, it's all contemplation. Hopefully they come out about the legal status of the cryptos soon. In one interview, Finance minister was very clear that they have only come out with taxation on cryptos but not about it being legal. But definitely that eliminates it's ban.
Many countries including the US are in favour of taxation on cryptocurrency.

 

[Yugocean]

Yes, it is definitely seen as a possibility that sooner or later cryptocurrency might get legalised in India. And taxation might be a step in that direction. But until and unless the government comes out clearly, it's all contemplation. Hopefully they come out about the legal status of the cryptos soon. In one interview, Finance minister was very clear that they have only come out with taxation on cryptos but not about it being legal. But definitely that eliminates it's ban.
Many countries including the US are in favour of taxation on cryptocurrency.

The government had nothing to ban the cryptocurrencies, the Supreme Court refused to ban it in 2020 and crypto gained popularity. Now any direct attempts to ban cryptocurrencies could bring trouble during elections.
So this time by imposing heavy taxes, govt tried to discourage people, this is an indirect ban.

About US and other countries, they have their own taxes, I india has its own. US consider crypto as "property" and tax it like any other assets, yet they remain unclear too. India is totally clueless.

Anyway I am clear that using CBDC is not going g to bring any good result, such currencies can be taxed or controlled.