Whether or not bitcoin, the biggest cryptocurrency in the world, is lawful in India, the Supreme Court has urged the government to state its position on cryptocurrencies.
In India, the central government is drafting legislation to regulate cryptocurrency as well as other digital assets. In the Union Budget 2022, Finance Minister Nirmala Sitharaman revealed that the federal government will levy a high 30% taxation on virtual assets, such as cryptocurrencies including nonfungible tokens (NFTs).
Budget 2022 suggested a new section 115BBH to levy taxable income on cryptocurrencies as well as other virtual assets in order to implement this cryptocurrency tax.
Is it legal to use cryptocurrency in India?
In Parliament, finance minister Nirmala Sitharaman explained that taxing cryptocurrency does not grant them legal status in the country. It is the sovereign power of the country to tax cryptocurrency transactions.
Any official stance on regulatory oversight, however, would not be taken until the ongoing consultations are finalized, according to the finance minister.
What Does a Crypto Tax Imply?
The suggested section 115BBH proposes that, where an assessee’s total revenue would include any revenue from the transmission of any virtual digital asset.
The income tax payable is the sum of the amount of income tax determined at a rate of 30% on the income from the transmission of any virtual digital asset as well as the amount of taxable income with which the assessee would’ve been charged had the total income of the assessee been lowered by the accumulation of the income from the transmission of any online virtual asset.
From Assessment Year 2023-24, the newly planned cryptocurrency tax will apply. That means you’ll be taxed at a 30% rate on all cryptocurrency income in FY 2022-23. For the fiscal years 2021-22, investors must pay tax in accordance with current tax laws.