Earlier today Tuesday, February 1, 2022, the Indian Finance Minister, Nirmala Sitharaman, announced a 30% tax on cryptocurrency income. However, some experts in the cryptocurrency marketplaces believe that the 30% tax would only increase tax burden for crypto investors. The experts assert that crypto investors would have to forcefully forgo a third of their crypto returns as taxes.
Some other crypto experts perceived this 30% tax as a strong move towards recognising crypto as an emerging asset class. However, not everyone in the crypto marketplaces is happy with this move as some consider the levy as too high.
During her budget speech, Minister Nirmala introduced 30% taxation of digital assets, including cryptocurrencies and Non-Fungible Tokens (NFTs). She also announced that the country’s digital rupee, which will be powered by blockchain technology, would be launched in 2022-23.
Nischal Shetty, the Founder and CEO of Indian cryptocurrency exchange, WazirX, said,
“The biggest development today was clarity on crypto taxation. This will add the much-needed recognition to the crypto ecosystem of India. We also hope this development removes any ambiguity for banks, and they can provide financial services to the crypto industry. Overall, it’s good news for us, and we will need to go through the detailed version of the budget to understand the finer details.”
Sumit Gupta, co-founder and CEO of CoinDCX revealed that the introduction of the 30% tax brings “much-needed confidence to the industry.” He added that “taxation of virtual digital assets or crypto is a step in the right direction.”
Sharat Chandra, a crypto evangelist who believes that the 30% tax would only increase the tax burden for investors, said,
“This move would force people to move to traditional modes of investment such as stock and mutual funds because they are not subject to as high as 30% tax.”
Minister Nirmala added that there would also be a 1% tax deduction at source (TDS) on payments made related to the purchase of virtual assets. To this, experts reacted that the 1% TDS rates can make crypto investment even trickier for crypto traders. Vishwanath, CEO of Unocoin cryptocurrency exchange said,
“There are multiple things here. Income tax at 30% is still acceptable but 1% TDS makes it tricky for intra-day traders in India.”
Keyur Patel, Co-Founder and Chairman of GuardianLink and BeyondLife.Club, an NFT platform, also expressed disappointment as the NFTs taxation.
What do you think about the introduction of the 30% tax on all incomes from cryptocurrency and NFTs? Tell us in the comments section below.
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