Profits derived from trading Crypto Assets will attract 30% taxes, Indian Finance Minister Nirmala Sitharaman made an announcement while addressing the budget session earlier today, February 1. This clears the air on crypto taxation which has previously kept investors on tenterhooks. The Finance Minister said:
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.
Post the pandemic, India’s crypto investing community has been growing at a massive speed with local investors putting billions of dollars into the market. Besides, with the crypto market hitting record highs last year, the trading activity on local Indian exchanges has also shot up significantly.
As per industry estimates, currently, there are 15 to 20 million crypto investors in India, reports Reuters. The collective crypto holdings of Indian investors is somewhere around 400 billion INR or $5.37 billion.
While the Indian Finance Minister announced heavy taxes on profits derived from crypto trading, she said that the losses cannot be offset against any other income.
Reaction from The Indian Community
India’s announcement of the Digital Rupee and the introduction of crypto taxes means that investors can freely participate in the crypto market without the fears of an absolute ban. This might lead to further liquidity and participation from Indian investors.
However, this 30% tax could also be a big deterrent for retail investors. Putting fat taxes on crypto profits also suggests that the government is not willing to encourage crypto investing among retail players. However, WazirX CEO Nischal Shetty sees it to be yet another step towards positive crypto regulations.
Clarity on crypto tax as well!
Income from transfer of any digital asset to be taxed at 30%
No expenditure deduction except cost of acquisition
Loss from digital asset cannot be setoff
Yet another step towards positive crypto regulations
#IndiaWantsCrypto
— Nischal (WazirX)
(@NischalShetty) February 1, 2022
We can see more regulatory clarity on crypto In India over the next financial year. However, one thing is clear that the government is willing to recognize the crypto asset class. Thus, we can expect further participation from Indian investors this year.
The post Breaking: India Announces 30% Tax on Crypto Profits, the Highest Tax Band In the Country appeared first on CoinGape.
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