India proposes 30% tax on crypto assets, including both cryptocurrencies and NFT’s, the finance and corporate affairs minister Nirmala Sitharaman said on Tuesday 1 February 2022.
“I propose to provide that any income from transfer of any virtual digital asset shall be taxed at the rate of 30%,” she is quoted as saying during budget discussions in the Indian parliament.
There is a “phenomenal increase” in transaction of virtual assets….Magnitude and frequency of these transactions have made it imperative to provide for a specific tax regime accordingly, for the taxation of virtual digital assets.
Nirmala Sitharaman
She further said: “No deduction in respect of any expenditure or elements shall be allowed while computing such income, except cost of acquisition.”
India proposes 30% tax on crypto with no exceptions for gifts
The tax on cryptocurrencies will be separate from any taxes levied on capital gains derived from other sources, and crypto investors will not be allowed to offset losses from cryptocurrency trading against any other source of income.
The finance minister also says that digital asset gifts will also be taxed under the new proposals, which are expected to be passed by the parliament later this month, and likely which will take effect from April 1st.
The Indian government has had an on-off relationship with crypto for the last few years, even threatening to block the IP addresses of crypto exchanges last year, but does appear to be moving ahead with it’s own digital rupee, which it expects to issue at some point in the next year.
Of course, once again, governments are wanting to take their pound of flesh from investors, because, well that’s what governments do isn’t it? In fact the Finance Minister told reporters that although the cryptocurrency bill is still being formulated, she did not want to wait for the regulations to be passed, and would like to start “taxing people who are earning profits” as quickly as possible. Let’s not forget what generally happens when governments start over-regulating and over-taxing.
