India regulates cryptocurrencies with the highest taxes in the country: 30%

From wanting to ban them forever to imposing new and very high taxes. Cryptocurrencies in India are driving entrepreneurs and investors upside down, who do not know what to do.

India today announced its plans to launch a digital currency by next year and tax cryptocurrencies and NFTs, as the country moves closer to recognizing cryptocurrencies as legal tender in the second largest Internet market in the world.

Income from the transfer of any virtual assets will be taxed with 30% taxsaid the country’s finance minister, Nirmala Sitharaman. What collides with the position that the country took a few months ago.

“No deduction will be allowed with respect to any expense or benefit when computing said income, except the cost of acquisition. In addition, losses arising from the transfer of digital assets may not be offset against any other income.“, he finished.

The proposal comes at a time when buying cryptocurrencies and NFTs is making its way fast in India despite the uncertainty regulation in the nation.

Binance-owned WazirX said last month that annual trading volume on its platform at India exceeded $43 billion in 2021, growing 1,735% from 2020. And that has a lot of merit in such a volatile market.

The central bank of India will also introduce a digital currency (CBDC) in the next fiscal yearTo this end, its CBDC has been tested through a series of controlled trials for several months in the country and has been examining its impact on the banking and monetary systems.

“The introduction of a central bank digital currency will give a huge boost to the digital economy. Digital currency will also lead to a more efficient and cheaper money management system“, explained the central bank through a press release.

Your neighbor to the north, China said earlier this month that the People’s Bank of China has processed more than 3 million transactions in digital yuan worth more than $160 million as part of their CBDC trial (no crypto, CBDC yes).

Today’s Indian proposals have created a bit more confusion among entrepreneurs, venture capitalists and the general public about how New Delhi plans to tackle cryptocurrencies.

By introducing a tax system for cryptocurrency related transactions, New Delhi appears to be recognizing these virtual assets as legal tender.