For the longest time, the crypto community in India was in the dark when it came to the classification and taxation of cryptocurrencies. However, this changed when Finance Minister Nirmala Sitharaman, in her 2022-23 Budget Speech, announced a 30 percent tax on all “virtual digital assets” including non-fungible tokens (NFTs). She also announced a 1 percent tax deducted at source (TDS) on the purchase of cryptocurrencies.
While the new tax laws mean that crypto assets are legal in India, there is still a pending regulatory bill that could change things once it is introduced. This bill has been titled ‘The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021’ and according to the Lok Sabha website, it will be introduced “to prohibit all private cryptocurrencies in India.”
Although this may sound worrying, the bill is still a work in progress and the newly introduced tax laws indicate a positive outlook from the government in regard to digital assets.
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