Indian Finance Minister Nirmala Sitharaman announced a 30% tax on any income from the transfer of virtual digital assets, a first for the nation.
- Additionally, she also said that the digital rupee will most likely be issued in the 2022-23, which is the first time the government has given a timeline on the launch of a central bank digital currency (CBDC).
- “There has been a phenomenal increase in transaction in virtual digital assets. The magnitude and frequency of these transactions have made it imperative to provide for a specific tax regime,” Sitharaman said in the critical Indian budget speech, which lasted for over two hours.
- Speaking on the adoption of CBDCs, Sitharaman said 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.”
- The Reserve Bank of India, India’s central bank, had earlier indicated launching a pilot CBDC project in the fiscal year April 2022 to March 2023.
- India’s crypto ecosystem had several demands which included a classification of cryptocurrencies, clarity on taxation, and a self-regulatory framework shaped by the crypto industry. While clarity on taxation has emerged, the formal classification of cryptocurrency is awaited.
Read more: India’s Crypto Industry Awaits New Budget