Economic Affairs Secretary Ajay Seth said on the sidelines of an event on Monday that inflation in India should ease in the coming months and the Center is ready with its consultation paper on cryptocurrencies.
He further said that there is a need to build a global consensus on cryptocurrencies and that India will look at the rules applicable in other countries before deciding how it will be regulated.
In the annual budget for 2022-23, the Center said it would tax benefits through cryptocurrency investments at 30%, but the country has yet to give legal status to the measure.
India differentiates between cryptocurrency and crypto assets, and during the Union Budget Union Finance Minister Nirmala Sitharaman said that 30% tax on income from these transactions will include 1% deduction at source.
His proposal to impose a 30% tax on cryptocurrency earnings took effect from April 1.
The Goods and Services Tax (GST) Council is also considering imposing a 28% tax on cryptocurrency, which is equivalent to the current GST on casinos, betting and lotteries.
The report said that if the resolution is passed in the next GST meeting, then sales and purchases as well as services like crypto mining are likely to attract 28% GST.
The 28% GST will be in addition to the 30% income tax on income from crypto asset transactions.
There is also 1% TDS (tax deducted at source) on transactions in such asset classes above a certain limit. Gifts in crypto and digital assets are also taxed.
A new section named ‘115BBH’ has been added in the Income Tax Act, 1961 to levy tax on digital assets.
During her visit to the US, FM Sitharaman raised doubts about the size of the worldwide cryptocurrency market and stressed the need for a regulatory mechanism acceptable to all countries to prevent launder money and its use to fund terrorism. Yes, which was a big concern. for India.
Bitcoin Rebounds Above $30,000
Bitcoin was finally showing some signs of life on Monday, having been trapped below the key $30,000 level for four days, with other cryptocurrencies following suit.
The largest cryptocurrency climbed for the third day, breaking above $30,000. It jumped 4.4% to $30,441.43.
While Bitcoin dominance has been rising recently, some altcoins were outperforming, with Avalanche rising 6.6% and Cardano up 8.6%.