A Caution to all the Crypto Users! 

 #𝐂𝐫𝐲𝐩𝐭𝐨 𝐮𝐬𝐞𝐫𝐬, 𝐇𝐞𝐫𝐞’𝐬 𝐰𝐡𝐚𝐭 𝐭𝐡𝐞 𝐁𝐮𝐝𝐠𝐞𝐭 𝐮𝐧𝐯𝐞𝐢𝐥𝐬 𝐟𝐨𝐫 𝐲𝐨𝐮 𝐚𝐥𝐥! 

 𝑻𝒉𝒆 𝑼𝒏𝒊𝒐𝒏 𝑩𝒖𝒅𝒈𝒆𝒕 2022 𝒘𝒊𝒍𝒍 𝒊𝒏𝒕𝒓𝒐𝒅𝒖𝒄𝒆 𝒓𝒖𝒍𝒆𝒔 𝒇𝒐𝒓 𝒕𝒂𝒙𝒂𝒕𝒊𝒐𝒏 𝒐𝒏 𝒄𝒓𝒚𝒑𝒕𝒐𝒄𝒖𝒓𝒓𝒆𝒏𝒄𝒚 𝒊𝒏𝒄𝒐𝒎𝒆. 

India is all set to launch a blockchain powered Digital Rupee. Blockchain-based and RBI-backed Central Bank Digital Currency (CBDC) will be introduced in the country. The phenomenal news will pave the way for crypto adoption and put India in the front seat of innovation. The incorporation of the Digital Rupee will have several advantages, including the ability to facilitate efficient utilization through government subsidy transfer programmes and the promotion of financial intermediation in remote locations, as it can be directly owned and transferred by end customers without any need for financial intermediary or complicated KYC procedures.

𝑪𝒓𝒚𝒑𝒕𝒐 𝒊𝒏𝒄𝒐𝒎𝒆 𝒊𝒔 𝒔𝒖𝒃𝒋𝒆𝒄𝒕 𝒕𝒐 𝒂 𝒔𝒊𝒈𝒏𝒊𝒇𝒊𝒄𝒂𝒏𝒕 𝒕𝒂𝒙! 

𝑨𝒄𝒄𝒐𝒓𝒅𝒊𝒏𝒈 𝒕𝒐 𝑭𝒊𝒏𝒂𝒏𝒄𝒆 𝑴𝒊𝒏𝒊𝒔𝒕𝒆𝒓 𝑵𝒊𝒓𝒎𝒂𝒍𝒂 𝑺𝒊𝒕𝒉𝒂𝒓𝒂𝒎𝒂𝒏, 𝒂𝒍𝒍 𝒊𝒏𝒄𝒐𝒎𝒆 𝒅𝒆𝒓𝒊𝒗𝒆𝒅 𝒇𝒓𝒐𝒎 𝒕𝒉𝒆 𝒕𝒓𝒂𝒏𝒔𝒇𝒆𝒓 𝒐𝒇 𝒂𝒏𝒚 𝒗𝒊𝒓𝒕𝒖𝒂𝒍 𝒅𝒊𝒈𝒊𝒕𝒂𝒍 𝒂𝒔𝒔𝒆𝒕 𝒘𝒐𝒖𝒍𝒅 𝒃𝒆 𝒕𝒂𝒙𝒆𝒅 𝒂𝒕 𝒂 𝒓𝒂𝒕𝒆 𝒐𝒇 30%.

Profits from digital assets will be taxed at a rate of 30%, with no deductions for expenditures. Losses on digital assets are not permitted to be deducted. Gifts of digital assets are likewise subject to taxation. On digital assets, there is a 1% TDS. India's crypto taxation has finally arrived. Long story short, taxation at the maximum rate would operate as a deterrent for Cryptocurrencies when compared to other investment classes/assets.

Lawyered’s Take 一 

How the Budget 2022 will affect the Crypto Gen !? 

While giving clarity, including a distinct tax structure for virtual digital assets is not what the business expected. The 30% tax rate combined with the ban on set-off losses is a strong move in deterring crypto transactions. This is a bold move that may deter transactions, yet it cannot be denied that this revelation provides more clarity on crypto transactions. It appears that the crypto industry will gradually shift from the fear of cryptocurrency bans and toward taxation of virtual assets.

The advent of CBDCs and taxation guidelines for digital assets has brought some clarity to India's cryptocurrency situation. The RBI will create a central digital money based on blockchain in 22-23. It is envisaged that the taxes of such currency would be clarified, since there are aspects of categorization (capital asset or otherwise), taxation rate, and transparency obligations to be addressed. Virtual digital asset revenue will be taxed at a rate of 30%. With the exception of the cost of acquisition, no deductions will be permitted. TDS on sale will be used to record transaction details. In the hands of the recipient, a VDA gift will be taxed. 

Indirectly, the tax on virtual products is beneficial since it places digital money under regulatory oversight, which is a huge boost for cryptocurrencies and Web 3.0. This would encourage companies to develop more blockchain-based goods and services. The 30% tax rate on cryptocurrency sales revenue is identical to the tax rate on profits from lotteries, game shows, and riddles, among other things. Over the last several years, digital currencies and assets such as NFTs (non-fungible tokens) have gained popularity across the world. With the establishment of cryptocurrency exchanges, trading in these assets has expanded dramatically. However, India lacked a defined framework for regulating and taxing these asset types.

Long story short, the government has followed through on its promise of a consistent and reliable tax framework, bringing the transfer of virtual digital assets within the tax net. 

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𝐌𝐨𝐫𝐞 𝐨𝐧 #𝐁𝐮𝐝𝐠𝐞𝐭2022 𝐢𝐬 𝐜𝐨𝐦𝐢𝐧𝐠 𝐮𝐩! 𝐒𝐭𝐚𝐲 𝐭𝐮𝐧𝐞𝐝!