Government Of India Imposes 30% Crypto Income Tax

India will tax revenue from crypto by 30 percent. (Cryptoknowmics)

JAKARTA – India's Minister of Finance, Nirmala Sitharman, has proposed a 30 percent tax on income from cryptocurrencies and other digital assets. Nirmala said that crypto-asset transactions experienced a phenomenal increase. This prompts it to collect taxes on any revenue generated through cryptocurrencies.

“There has been a phenomenal increase in virtual digital asset transactions… The magnitude and frequency of these transactions have made (crypto assets) very important to be subject to certain taxes”, said Minister of Finance, Nirmala Sitharman.

“I propose to stipulate that any income from the transfer of any virtual digital asset will be taxed at 30 percent. No deductions concerning any expenses or allowances are permitted when calculating such income, except for the cost of acquisition”.

As reported from Bitcoin.com News, not only revenue from crypto, the Indian government will also collect taxes from the sale of NFT with the same percentage.

Harish Prasad, head of banking, India, FIS, said: “This has been an eagerly awaited announcement in the context of interest and growth in investment in this asset. Uncertainty and concerns regarding the legal, regulatory and tax status of cryptocurrencies are addressed to a reasonable extent based on this announcement”.

Although the tax is considered too high, it is considered a positive step from the Indian government because it signals positive sentiment towards crypto and NFT.

“The thirty percent tax on revenue from virtual digital assets, although high, is a positive move as it legitimizes crypto and signals optimistic sentiment towards further acceptance of crypto and NFT”, said Zebpay crypto exchange CEO, Avinash Shekhar.

Nischal Shetty, CEO of crypto exchange Wazirx, commented: “We also hope this development clears ambiguity for banks and they can provide financial services to the crypto industry”.

However, tax consultant Amit Maheshwari warns that individuals may end up paying more than 30 percent of their crypto profits in taxes and other fees. Amit Maheshwari, partner at tax consulting firm AKM Global.

"If you make a profit of 100 rupees, then including the 30 percent tax bracket, plus any surcharges and deductions, the total tax expenditure will be around 42 rupees", Maheswari told Reuters.

Another announcement that India's finance minister made on Tuesday was about the launch of the country's central bank digital currency (CBDC), namely the digital rupee. He said the central bank, the Reserve Bank of India (RBI), would introduce a digital currency from the 2022-2023 financial year.

“The introduction of a central bank digital currency (CBDC) will provide a major boost to the digital economy. Digital currency will also lead to a more efficient and cheaper currency management system”, said India's Minister of Finance, Nirmala Sitharman.