Government says it has no plans to regulate Metaverse, Web 3.0
The government has made it clear that it has no plans to introduce any rules to the Metaverse or Web 3.0, as these technologies are still being developed.
However, with effect from April 1, 2022, the government has imposed 30 percent tax on income from trading in cryptocurrencies and 1 percent TDS on every such transaction.
Finance ministry sources have said that they are aware of emerging new technologies and rapid proliferation of technologies such as Artificial Intelligence, Blockchain, Drones, Augmented Reality, Metaverse and Web 3.0.
He further added that the government has already formulated a national strategy for Artificial Intelligence and Blockchain.
Furthermore, the Information Technology Act 2000 covers the technology sector in the country, and hence the government does not intend to regulate such developed sectors.
In another new tax clarification on the disadvantages of digital assets that cannot offset gains from a property transaction, it has received severe backlash.
The government’s explanation for denying losses in a particular digital asset against income from another crypto holding is “detrimental to India’s crypto industry and the millions of people investing in this emerging asset class,” said Ashish Singhal, Co- Founder and CEO of CoinSwitch, one of India’s top crypto exchange said.
The government will not allow tax breaks on infrastructure costs. At the same time, mining of crypto assets will not be considered as cost of acquisition, Minister of State for Finance Pankaj Choudhary told lawmakers in Parliament on Monday.
The clarification by the minister is another blow to an industry that was slapped with a hefty 30 per cent tax rate on profits from digital asset transactions in the budget presented last month.
And the lack of regulation is a good thing for Metaverse technology, components of which have already been developed within online video games.
What is Metaverse?
The Metaverse is a network of 3D virtual worlds focused on social connections. In futurism and science fiction, it is often described as a fictional iteration of the Internet as a single, universal virtual world facilitated by virtual and augmented reality headsets.
What is Web 3.0?
Web 3.0 is an idea for a new iteration of the World Wide Web (www) based on blockchain technology, which includes concepts such as decentralization and token-based economics.
The term was coined by Ethereum co-founder Gavin Wood in 2014, and the idea garnered interest in 2021 from crypto enthusiasts, large tech companies, and venture capital firms.