India will Tax Cryptocurrencies at 30%, Placing Digital Assets in the Highest Tax Bracket1 min read
Though the government has yet to announce whether and how cryptocurrencies will be permitted, sources have long stated that cryptocurrencies will be recognised as a digital asset. Today, Finance Minister Nirmala Sitharaman said that income from digital assets will be taxed at 30 percent, the highest tax band in the country.
Instead of outright banning cryptocurrencies, the Modi administration is drafting regulations to oversee their usage. Losses from transactions in virtual digital assets, according to the Finance Minister, cannot be adjusted against other income. The tax on bitcoins given as presents will be borne by the recipient.
“I suggest that any revenue derived from the transfer of any virtual digital asset be taxed at a rate of 30%. No deduction shall be permitted in respect of any expenditure or allowance in computing such income, save the cost of purchase,” the minister stated.
As per industry estimates, there are 15 million to 20 million cryptocurrency investors in India, with total crypto holdings of over 40,000 crore ($5.29 billion). The government is moving toward recognizing cryptocurrencies as a financial asset; while users will not be allowed to make payments with them, they can be held in the same way of shares or gold.
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