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Good News for Crypto Investors!!! FidoMeta
Cryptocurrency is no longer banned in India! From ‘Banning Cryptocurrency’ in 2019 to ‘Introducing Cryptocurrency Regulation Bill’ in 2021, Indian government’s stand on cryptocurrency has witnessed a massive shift in the last 4 years. Earlier, the government was against selling, mining or receiving cryptocurrencies and totally prohibited banks from supporting crypto transactions.
Now, Indian government has introduced a bill to regulate cryptocurrency transactions in the country. Called as ‘The Cryptocurrency and Regulation of Official Digital Currency Bill’, it lists certain rules and regulations on cryptocurrency transactions. The government is now open to experiment the crypto market and allow cryptocurrency transactions.
“The whole idea of Indian government is to ‘regulate’ cryptocurrency transactions, and not ban them”
RBI’s Stand On Cryptocurrency
While the Indian government wants to regulate crypto transactions, the Reserve Bank of India is completely against cryptocurrencies, as it sees them as a threat that has the potential to cause financial instability. This is because cryptocurrencies foster financial freedom and do not have a central regulatory system like banks.
With the increasing popularity of cryptocurrencies like Bitcoin and Ethereum, RBI has its own plans to introduce an official digital currency in the near future. Finance Minister Nirmala Sitharaman has announced in her recent budget speech that RBI will introduce a blockchain based Central Bank Digital Currency (CBDC) by 2023. If CBDC becomes a reality, it will be set a massive crypto storm in India.
Cryptocurrency Tax Regime
Indian government has recently announced a tax regime for cryptocurrency transactions. Flat 30 per cent tax should be paid be people who gain income from their crypto or virtual digital assets (VDAs). Cryptocurrencies and NFTs fall under these. Even in case of losses, the tax amount has to be paid. When it comes to digital / virtual gifts, the recipient of the gift will be taxed.
The announcement of the tax regime comes in wake of the increasing frequency of crypto transactions. The tax regime has no negative effects on the cryptocurrency prices in the market.
Tax regime is imposed only on cryptocurrencies and NFTs. They will not affect digital payments like Google Pay, Paytm or Amazon Pay. One must not confuse between crypto transactions and digital payments.
Who Will Be Impacted By India’s New Crypto Tax Regime?
The new tax law will have a major impact on
• The buyers and sellers of cryptocurrencies, who engage in crypto trade in crypto exchanges such as CoinDCX, WazirX, Kuber match and more will be taxed.
• Not just the buyers and sellers, even the crypto exchanges in India who indulge in transactions to get supplies of cryptocurrencies from other countries to sell domestically will be taxed. Their profits and revenue will be impacted.
• People who buy cryptocurrencies from Indian exchanges will have to pay the 1% TDS.
• People who own NFTs and virtual assets or gifts will be taxed.
• In-app purchases and reward points offered by apps and social media organizations will be impacted by the crypto tax regime.
• There are also chances for dating, gaming and social media apps to be taxed 1% TDS as they come under virtual digital assets, according to the government.
To conclude, as of now, Indian government has made up its mind to support and regulate crypto trade and transactions. The government has future plans to introduce their own RBI-backed cryptocurrency. Despite the recent announcement of the crypto tax law, traders and businessmen involved in crypto trade seek more clarity from the government on the taxing process. India does not involve in mining of cryptocurrencies, therefore it has to buy them from outside the country, being subjected to the crypto tax law.
Good News for Crypto Investors!!! FidoMeta
Cryptocurrency is no longer banned in India! From ‘Banning Cryptocurrency’ in 2019 to ‘Introducing Cryptocurrency Regulation Bill’ in 2021, Indian government’s stand on cryptocurrency has witnessed a massive shift in the last 4 years. Earlier, the government was against selling, mining or receiving cryptocurrencies and totally prohibited banks from supporting crypto transactions.
Now, Indian government has introduced a bill to regulate cryptocurrency transactions in the country. Called as ‘The Cryptocurrency and Regulation of Official Digital Currency Bill’, it lists certain rules and regulations on cryptocurrency transactions. The government is now open to experiment the crypto market and allow cryptocurrency transactions.
“The whole idea of Indian government is to ‘regulate’ cryptocurrency transactions, and not ban them”
RBI’s Stand On Cryptocurrency
While the Indian government wants to regulate crypto transactions, the Reserve Bank of India is completely against cryptocurrencies, as it sees them as a threat that has the potential to cause financial instability. This is because cryptocurrencies foster financial freedom and do not have a central regulatory system like banks.
With the increasing popularity of cryptocurrencies like Bitcoin and Ethereum, RBI has its own plans to introduce an official digital currency in the near future. Finance Minister Nirmala Sitharaman has announced in her recent budget speech that RBI will introduce a blockchain based Central Bank Digital Currency (CBDC) by 2023. If CBDC becomes a reality, it will be set a massive crypto storm in India.
Cryptocurrency Tax Regime
Indian government has recently announced a tax regime for cryptocurrency transactions. Flat 30 per cent tax should be paid be people who gain income from their crypto or virtual digital assets (VDAs). Cryptocurrencies and NFTs fall under these. Even in case of losses, the tax amount has to be paid. When it comes to digital / virtual gifts, the recipient of the gift will be taxed.
The announcement of the tax regime comes in wake of the increasing frequency of crypto transactions. The tax regime has no negative effects on the cryptocurrency prices in the market.
Tax regime is imposed only on cryptocurrencies and NFTs. They will not affect digital payments like Google Pay, Paytm or Amazon Pay. One must not confuse between crypto transactions and digital payments.
Who Will Be Impacted By India’s New Crypto Tax Regime?
The new tax law will have a major impact on
• The buyers and sellers of cryptocurrencies, who engage in crypto trade in crypto exchanges such as CoinDCX, WazirX, Kuber match and more will be taxed.
• Not just the buyers and sellers, even the crypto exchanges in India who indulge in transactions to get supplies of cryptocurrencies from other countries to sell domestically will be taxed. Their profits and revenue will be impacted.
• People who buy cryptocurrencies from Indian exchanges will have to pay the 1% TDS.
• People who own NFTs and virtual assets or gifts will be taxed.
• In-app purchases and reward points offered by apps and social media organizations will be impacted by the crypto tax regime.
• There are also chances for dating, gaming and social media apps to be taxed 1% TDS as they come under virtual digital assets, according to the government.
To conclude, as of now, Indian government has made up its mind to support and regulate crypto trade and transactions. The government has future plans to introduce their own RBI-backed cryptocurrency. Despite the recent announcement of the crypto tax law, traders and businessmen involved in crypto trade seek more clarity from the government on the taxing process. India does not involve in mining of cryptocurrencies, therefore it has to buy them from outside the country, being subjected to the crypto tax law.