Indian Budget Shows Initial Trust On Cryptocurrency
The forthcoming budget will see cryptocurrency being taxed at 30 percent, is a confirmed statement by sources. This will also include transferring any assets to digital ones. This development will also affect gains through NFTs as well.
Further, India will see a new digital rupee powered by blockchain technology that will be issued by the Reserve Bank of India starting 2022-23. This the Finance Minister Nirmala Sitharaman said would “really lead to a more efficient and cheaper currency management system.”
The Central Bank Digital Currency or CBDC is most likely going to be the digital currency version of India’s fiat currency built on blockchain technology. People can expect CBDC to roll out in the financial year 2023.
Prime Minister Narendra Modi praised the budge calling it “people-friendly” and “progressive”.
“No deduction in respect of any expenditure or allowance shall be allowed while computing such income except cost of acquisition. Further, loss from the transfer of virtual digital asset cannot be set off against any other income,” she added.
Blockchain technology will also power cryptocurrency, non-fungible tokens (NFTs) and it is a distributed ledger, updated in real-time. In a blockchain, the transaction records cannot be changed at all and the ledger is transparent and authentic, which is why it is used in cryptocurrency as well.
Along with India, In October 2021, Nigeria launched eNaira, which is a non-interest-yielding CBDC. Bahamas and five other islands in the East Caribbean have also introduced CBDCs. Economists have said that indeed, India has started to open its mind towards digital currency. But it’s still a long road ahead to get it into the mainstream, owing to weak cyber security and general norms.
While profits and transactions are taxable, the losses will remain so.