India propose 30% Tax on Crypto Income and prepares to launch a 'Digital Rupee'
As part of the government's effort to collect revenue from private crypto companies, the finance minister of India Nirmala Sitharaman proposed a 30% tax on all crypto transaction gains.
According to the disclosure included in India's 2022 Union Budget, the country will also introduce its digital rupee soon, making it the tenth country to do so.
The Indian government's decision to introduce a digital rupee is both driven by the long-term goal to digitize the country and its growing digital currency ecosystem. While the country is attempting to control its entire financial sector, it also hopes to reap maximum profit from the sector.
Sitharaman explained to the house of parliamentarians that, "the introduction of Central Bank digital currency (CBDC) will give an enormous boost to the digital economy.”
She adds, “digital currency will also lead to a more efficient and cheaper currency management system.”
RBI will issue the digital rupee and build it using blockchain technology and other related technologies, which will be subject to CBDC regulations. It is likely that the digital rupee will be issued between 2022 and 2023, added Sitharaman
Earlier, the Bitcoin industry in India was quite persistent in its demand to classify cryptocurrencies, clarify taxation, and build a self-regulatory framework. But after the budget speech, there's a concern among some experts that the 30% tax may scare off retail investors.
On Tuesday, the government announced that virtual digital asset transfer income would be subject to a 30 percent tax, with no deductions or exemptions. Clarifying that this tax is geared specifically toward these transactions because of their magnitude and frequency.
In 2021, 9.6 million users, most gullible individuals, visited scam sites in India as a result of the upward trend in crypto companies.
CBW - External Analyst