Good news: The Indian government fully accepts crypto. Bad news: they’re slapping a heavy tax on it.
The Indian government announced that it will impose a 30% tax on the sale of cryptocurrency assets and non-fungible tokens (NFT). This is after months of uncertainty regarding the digital assets’ status in the country.
This announcement also reveals that digital assets will be in India’s highest tax band. What’s more, finance minister Nirmala Sitharaman said that the losses that may incur from the sales cannot be offset against other income.
It’s been estimated that there are around 15 to 20 million crypto investors in the country, with holdings of around INR400 billion (around Php273 billion).
While the tax percentage is high, crypto proponents remain enthusiastic as it “is a positive step as it legitimizes crypto and hints at an optimistic sentiment towards further acceptance of crypto and NFTs,” says Avinash Shekhar of ZebPay, a crypto exchange platform.
Another crypto exchange, WazirX, hopes that the new tax rule “removes any ambiguity for banks and they can provide financial services to the crypto industry,”
The central bank of India previously raised its concerns regarding private cryptos saying that they may cause financial instability. This resulted in a lot of banks ending their ties with crypt firms.
Now, the country’s finance minister said that the central bank themselves will introduce its digital currency starting next financial year, which would be a big boost to the digital economy.