Union Budget 2022 : Government Indirectly Legalized Crypto by Imposing 30% Tax on Cryptocurrency Income in India
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Union Budget 2022 : Government Indirectly Legalized Crypto by Imposing 30% Tax on Cryptocurrency Income in India
Union Budget 2022 is live. 30% taxation on Cryptocurrency, RBI to issue blockchain based digital currency (CBDC) by 2022-23
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1. Issue of Blockchain based Digital Rupee by RBI in 2022-23 (CBDC).
2. 30% Tax on Crypto income.
3. No deduction to be allowed except cost of acquisition.
4. Loss from sale of Digital Assets can be set off only against gains from sale of virtual digital assets.
5. Gift(Airdrops) to be taxed in the hands of the recipient.
6. Payment TDS rate 1%.
7. both two points implies Cryptocurrency trading & investing is fully legalized in India from now.
8. Crypto Bill is still pending which may take few months can demonstrate the actual legal framework of Crypto in India.
This Union Budget Indian Government has indirectly legalized Cryptocurrency by imposing tax over it which is a big news for crores of crypto traders in India. Besides this the adaptation of blockchain technology which is proved by issue of RBI Digital currency (CBDC) on 2022-23 another big move towards new age of technology which will make tech economy of nation more strong.
As we know Bitcoin and other cryptocurrencies are the popular use case that helped explore the actual potential of Blockchain technology near tech & finance enthusiastic youths across the world. After the Crypto boom many big corporations started adaptation of Blockchain technology and due to multiple national & international microeconomic development many millennial and small investors have started investing in Cryptocurrencies in India.
Now The Indian government has realized the advantage of Blockchain technology and progressive crypto regulations which will lead to an innovative and strong financial ecosystem. Discouraging crypto assets will lead to big loss of emerging investing classes, impacting upcoming biggest blockchain innovations. The average age of investors on crypto assets is approx. 28 and India is ranked second in the Global Crypto Adoption Index according to the Chainalysis in August 2021.
Despite huge popularity of Crypto assets in india,Crypto market is going through a lack of Regularity Framework and due to this all Indian crypto exchanges like WazirX, Coinswitch, CoinDCX etc has made their own regulatory framework to protect customers against fraud and other illegal activities. But this is not sufficient as many cases of money laundering and terror funding also happed in India and this is the reason government need to back the Crypto asset with a strong regularity framework and thus Crypto Regulation Bill comes and still pending to get clearance about crypto adaptation policies in India. The Union Budget 2022 has seen a big audience as millennial crypto investors on 1st February but the government decided not to include the crypto bill this budget session but a Cryptocurrency tax of 30% has been imposed which is quite high but at least government has legalized Crypto, this is the hot news of today and we can see a big debate over high tax imposed on Crypto trade in India.
Blockchain technology and Web 3.0 can be a big opportunity for India as it was not an active part of Web 1.0 & Web 2.0 in it’s initial days like USA & China in the 20's technology revolution. So, it’s crucial time for India to support the emerging workforce and engage them. Big tech giants like Google, Yahoo, Facebook, Amazon, Microsoft, Alibaba took advantage of Web 2.0 to lead the world. India has the potential to become the global leader in Web 3.0 and the next Amazon or Google might be built on blockchain in India. Indian entrepreneurs who want to build tech companies on blockchain technology should explore international prospects that will support their goal and that can lead to building something to lead the new world.
Even as India is waiting for a detailed Crypto Regulatory Framework from the government, there is no Cryptocurrency Bill on the budget 2022 session agenda which is going to be presented by Finance Minister Nirmala Sitaraman on 1st February. Every Indian crypto investor was hoping for clarity on the crypto taxation process from Budget 2022 and today government has cleared Crypto tax which is 30% on trading and you must have to pay even you get big loss in crypto trade.
This can greatly benefit the growing industry and the government as well. The trillion-dollar crypto industry can insure a safe, secure, and transparent digital economy to society at large. Now, Indian Government has acknowledge the crypto evolution. Now we know crypto is legal and a counts under asset class that has the potential to open many doors to industry-first innovations and global technological leadership.
Share your thoughts on Union Budget 2022 and Crypto Bill which can change the future of the country as a tech savvy & biggest economy.
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Bad move by govt. i have invested a good amount on crypto and if i able to make a big profit will shift somewhere in Dubai or Singapore.
" No deduction in respect of any expenditure or elements shall be allowed while computing such income except the cost of acquisition for loss from the transfer of virtual digital assets cannot be set off against any other income "
I think 30% tax is on the income(profit) taking into the account the cost of acquisition, and any loss arising out of this crypto trade cannot be offset elsewhere.
E. g I buy crypto worth 1000 and sell it at 1500 ₹. I will be taxed 30% on the profit, that is selling price minus the cost of acquisition (1500-1000), so my tax liability Wil be 30% of 500 ( not 1500)
And also let’s assume that my income from salary is around 10 lakh and I have to pay income tax of around 50k on it after all the deductions under section blah blah of IT act. Now I cannot say that even though my income from salary is 10 lakh but I invested 20 lakh in crypto and market has fallen and now my investment is 10 lakh only… So please consider my net salary as ZERO… 0..and please refund my 50k which I paid as income tax.
Correct, let’s wait for Crypto bill for more clarity and the 30% tax will be applied from April the new financial year I think.
Govt should Impose 50% Tax on Cryptocurrency.
Crypto miners just waste electricity and nothing else. India, China, Russia face load shedding multiple times in various cities because of crypto mining.
Chip shortage and graphics card price hike is another problem.
This matter should be taken to the UN, Ban cryptocurrency atleast on planet earth.
(ok, last sentence kuch jada ho gaya but my first 3 points are 100% true). 😬
True, but decentralized things are most of the time out of control. For that each and every nation has to work together.
Not sure who is thinktank in govt but 30% tax is too high. People wont declare their holding.