Just earlier in this week, India announced its plans with respect to a digital currency which will be subject to launch next year. Indeed the country even went as far as suggesting to tax virtual assets such as cryptocurrency and NFT – as the country makes a move towards recognizing digital currencies as a legal tender.
In accordance with what the finance minister has had to say, the Indian government is in fact in the process of proposing a 30% tax on income from the transfer of virtual assets. It was further added by the finance minister then that one percent tax should in fact be deducted at source on payments that that happen to be made on the purchase of digital assets. The minister is noted to have said : “No deduction in respect of any expenditure or allowance shall be allowed while computing such income except cost of acquisition. Further, loss from transfer of digital asset cannot be set off against any other income. Gift of virtual digital asset is also proposed to be taxed at the hand of the recipient.”
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This news of course makes its way as India paves way for cryptocurrencies as well as NFTs to make their way into the country as well as the economy, however, the regulations that have been put in forward nu the government on such assets still happen to be rather uncertain. It’s interesting then to note that India’s central bank also happens to be in the position of planning on a new digital currency altogether, and this is set to be released sometime next year. It has indeed already began testing, and this process is likely to go on for several months now as the nation analyzes the impact it will have on both its banking as well as its monetary systems.
