New Delhi: The sales of cryptocurrencies in India are increasing rapidly. The government is also keeping a close eye on the business of cryptocurrency. In view of this, the Government of India took a very important decision regarding cryptocurrency. Now the government will also have to pay tax in the purchase and sale of cryptocurrency.
Cryptocurrency Tax in India
Indian government has announced the imposition of a tax on cryptocurrency in its budget. In the budget speech, Finance Minister Nirmala Sitharaman said that it has been decided to impose tax on virtual digital assets.
It was told in the budget that 30 percent tax will be levied on such income. The government has taken a big decision to tax crypto currency in its budget.
“I propose to provide that any income arising from transfer of any virtual digital asset shall be taxed at the rate of 30%,” Finance Minister Nirmala Sitaran said in the budget speech.
She further stated that, “No deduction shall be allowed in respect of any expenditure or allowance while computing such income, except the cost of acquisition.”
Finance Minister further said that no set off will be allowed in case of loss. In addition, the gift of cryptocurrencies will be taxed at the recipient’s end.
There will be a direct 30% tax on virtual digital asset transfer i.e. 30% tax on cryptocurrency profits, while the loss incurred cannot be adjusted against any other profit. The announcement of heavy tax on income has come as a big disappointment for crypto investors.
The finance minister also said that a blockchain-based and RBI-backed central bank digital currency would be introduced by 2023. At the same time, some investors believe that by doing this the government has made it clear that it will not allow crypto, that too in the form of a currency.