Indian Finance Minister Nirmala Sitharaman declared a 30% tax on any income derived from the transfer of virtual digital assets, a term commonly used to represent cryptocurrencies, in a first for the subcontinent.
The digital rupee would most likely be released between 2022 and 2023, according to the ministry. The Indian government has set a deadline for the creation of a central bank digital currency (CBDC) for the first time.
Sitharaman said in her budget speech in India, “There has been a phenomenal increase in a transaction in virtual digital assets. The magnitude and frequency of these transactions have made it imperative to provide for a specific tax regime.”
Sitharaman further added that a “digital rupee” will be “issued using blockchain and other technologies; to be issued by RBI starting 2022-23. This will give a big boost to the economy.”
When asked about the unregulated taxation of cryptocurrency transactions, the finance minister stated, “We have circulated a paper, inputs are coming in, public stakeholders are coming in so regulation goes through that process. I don’t wait till regulation comes into place taxing people who are earning profits. Can I?”
Other Countries Legalizing Cryptocurrencies
Previously, in September 2021, El Salvador made history by becoming the first country to legalize cryptocurrencies, making Bitcoin an official currency.
The United States Department of Treasury’s Financial Crimes Enforcement Network (FinCEN) has been issuing guidelines regarding Bitcoin since 2013.
While the European Union does recognize cryptocurrencies as an asset, yet it is illegal to use crypto within the EU. Other countries including Canada, Australia, Denmark, France, Germany, Iceland, Japan, Mexico, Spain, and the United Kingdom hold a friendly stance on cryptocurrencies and have developed some form of regulation.
To read our blog on “Spain has established new guidelines for cryptocurrencies promotion,” click here.
