The government of India remains set on taxing cryptocurrencies. Finance minister, Nirmala Sitharaman, has said that crypto taxes will come into effect as planned. This is despite India not having decided on if crypto will be banned or not, although the country made it clear that cryptocurrencies will never be made a legal tender.
Taxing crypto is legitimate, says India’s finance minister
This month, India’s budget presented by the finance minister proposed a comprehensive tax regime on digital assets. Indian news outlet, the Times of India, reports that finance minister, Nirmala Sitharaman, has continued to back India’s plans to tax cryptocurrencies.
Responding to a question from Congress member Chhaya Verma, she stated that making cryptocurrencies legal and taxing them were different issues. She notes that while crypto regulation remains in limbo and was not in her place to decide, India has a sovereign right to tax digital assets.
I am not going to legalize it or ban it at this stage. Banning or not banning will come subsequently, when consultations give me input. (Whether it is) legitimate or illegitimate, it is a different question, but I will tax because it is a sovereign right to tax, she said.
The new tax regime imposes a 30% tax on profits made from crypto trading, adding that no deductions in respect to expenditures can be made while filing crypto taxes. The proposal also imposes a one percent TDS and states that losses from crypto cannot be deducted from other incomes for tax purposes. According to reports, the gains taxation provision will come into effect on April 1.
Asia remains divided on crypto regulations
Despite going ahead with taxation, India is still mulling over the question of if cryptocurrencies should be banned or allowed in the country. The parliament of the South Asian country has yet to reach a final decision. However, crypto investors remain hopeful that with taxation already approved regulatory clarity will arrive soon.
The situation is similar in other Asian countries. Rising crypto adoption across the continent has caused various governments to seriously consider the economic implications. Like China, several Asian countries are considering banning the industry.
While others like Japan and South Korea have introduced strict policies targeted at cryptocurrencies. Meanwhile, Singapore has stated plans to become a global crypto hub by making crypto-friendly regulations.
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