India earned $19.2 million from the new legislation that would tax crypto transfers at a rate of 30%.
India’s heavy crypto taxes
India’s Finance Minister Nirmala Sitharman has proposed in the 2022-2023 Union Budget to levy a 1% TDS on cryptocurrency transactions. In addition, a 30% tax is levied on income from these transfers.
On April 1, the new 30% tax law came into effect in India. The TDS levy was then introduced in July 2022.
Until March 20, the government had received Rs 157.9 crore ($19.2 million) in direct tax revenue from cryptocurrencies. When asked, the ministry revealed the numbers.
Web3 Plan for India
At a recent event, Rajeev Chandrasekhar, India’s Information Technology Minister, stated that India wants to ensure that innovation is not stifled. At the same time, he stressed that the security of the country and the objectives of the intelligence services take precedence. In addition, he also wants to ensure the convenience of doing business and living.
I am clear about the way we look at industries: not on the basis of comfort or inconvenience, but on the basis of harm, legality and illegality. This is the starting point with which we assess certain areas and develop legislation.
—Rajeev Chandrasekhar
Chandrasekhar emphasized that the Indian government is very supportive of any innovation related to the internet, including web3 and blockchain. He claimed that the government encourages these technologies and has a strong position on them.
We recognize that there are no issues with anything related to blockchain. However, the Reserve Bank of India (RBI) has indicated that cryptocurrencies pose potential macroeconomic risks.
—Rajeev Chandrasekhar
Crypto in India ‘not illegal if regulated’
The Central Bank of India has repeatedly emphasized the potential risks to financial stability associated with cryptocurrencies, recommending a general ban on this asset class.
Chandrasekhar has previously stated that there are no issues trading cryptocurrency in India as long as all rules are adhered to. He stressed that buying digital currency from legitimate sources would not be against the law. He concluded that governments should be cautious given the continuing market uncertainty.
Just because it sounds like an innovative, fashionable thing to do, we shouldn’t blindly assume that crypto is right and crypto is good.
-Rajeev Chandrasekha