One of the most anticipated announcements in the Union Budget 2022-23 was pertaining to the digital assets such as cryptocurrencies and their legal status in India.
In the budget 2022, Hon’ble FM Nirmala Sitaraman has announced that a new digital rupee powered by blockchain technology will be issues by the Reserve Bank of India (RBI) early in the year 2022-23 and is believed to give a boost to the digital economy by providing a more efficient and cheaper currency management system. Furthermore, it was proposed that tax gains from virtual assets will be taxed at the rate of 30 per cent and no deduction will be allowed on these gains. It was also states that a TDS of 1 per cent will be levied on payment made for transfer above a particular threshold.
The clarity on acceptance and taxation of cryptocurrencies was long overdue since the hype around the industry in the past few years. The budget of 2022 has provided clarity to the rapidly growing crypto industry and has provided reassurance by showing acceptance of the blockchain technology and its benefits by the government.
This blog was authored by Bhamini Rathore.