- India reportedly has around 20 million cryptocurrency investors, with total crypto holdings worth US$5.29 billion.
- Industry experts have expressed hope that the decision to impose a 30% tax on digital assets would help legitimize cryptocurrencies in India.
- The cryptocurrency market has exploded in the last few years, forcing governments to think over its financial implications.
Indian Finance Minister Nirmala Sitharaman on Tuesday presented the Union Budget 2022 and announced a 30% tax on income from all digital assets, including cryptocurrencies.
"I propose to provide that any income from transfer of any virtual digital asset shall be taxed at the rate of 30 percent. No deduction in respect of any expenditure or allowance shall be allowed while computing such income," the minister said.
Sitharaman also said that the Reserve Bank of India would issue a new digital rupee starting 2022-23. She added that blockchain technology would power the new digital rupee.
According to reports, India has around 20 million cryptocurrency investors, and their total crypto holdings is worth US$5.29 billion.
Industry experts have welcomed the announcement made by Sitharaman and expressed hope that the decision to impose a 30% tax on digital assets will help legitimize cryptocurrencies in India. They noted that the Indian government has finally provided clarity on crypto transactions, but it would not be easy to track these digital transactions because India still lacks a central regulator.
If India decides to legitimize digital currencies, it will boost the crypto market further because India has many investors. Experts maintain the legalization of cryptocurrencies will end all apprehensions of Indian investors. They would not hesitate to invest in cryptocurrencies, which will help the crypto business grow.
Also Read: 5 key crypto predictions for February 2022
Will the government bring a crypto bill?
The media reported last year that New Delhi would soon bring a bill related to cryptocurrencies. The reports claimed that the government might ban all private cryptocurrencies with a few exceptions.
The launch of Bitcoin, the first cryptocurrency, in 2009 sparked a debate across the globe over its legalization. However, today, many cryptocurrencies exist like Ethereum, Tether, Binance, Dogecoin, etc.
The cryptocurrency market has exploded in the last few years, forcing governments to think over its financial implications.
Many countries have now banned cryptocurrencies, including China, Turkey, Qatar, Colombia, Egypt, Bolivia, Vietnam, Nigeria, Nepal, Morocco, Indonesia, Algeria, Bolivia, and Bangladesh.
On January 20, 2021, Russia's central bank had also proposed banning the use and mining of cryptocurrencies in the country. It noted that cryptocurrencies are a threat to the country's financial stability and the wellbeing of its citizens.