The Union Budget 2022 has proposed that the transfer of cryptocurrency or any virtual asset will now be taxed at 30 per cent. No deduction except cost of acquisition will be allowed and no loss in transaction will be allowed to be carried forward, Finance Minister Nirmala Sitharaman said. No setoff has been permitted against other income. “Prima facie it seems digital currencies will be taxed akin to speculative income at 30 per cent flat on a gross basis,” said Amit Singhania, Partner, Shardul Amarchand Mangaldas. Twitter users who have been processing the news with memes seem to have assumed that this is the case. Crypto investors have descended on the scene as “30% Tax” trends on Twitter and are expressing their opinions through a range of memes.
On one hand, many are of the opinion that the taxation implies that crypto is now “legal” in India; on the other, many have voiced their opinions on the focal 30% figure.
— ciazo (@_03believer) February 1, 2022
— Harshit Mishra (@infowalaharsh) February 1, 2022
— Sagar (@sagarcasm) February 1, 2022
— Godman Chikna (@Madan_Chikna) February 1, 2022
When Crypto became legal but you have to pay 30% tax on income from sale of digital assets. pic.twitter.com/oa6lFcWaSm
— ☄ (@uptownfreakkk) February 1, 2022
— Elliot Alderson. (@NotThatElliot) February 1, 2022
*There will be 30% tax on Crypto coins*
Crypto investors : pic.twitter.com/ZTftUcRZLx
— Harshhh! (@Harsh_humour) February 1, 2022
30% tax on Crypto and NFT gains!
Loss cannot be set-off against any income.
Current market status be like: pic.twitter.com/Qk1dDo3cjS
— Akash Singh (@akkashh_) February 1, 2022
— bihari__queen🦋 (@SINGHRANI007) February 1, 2022
Not everybody’s worried: for example, those who never bothered to jump onto the Crypto bandwagon to begin with.
— Preal958 (@puru958) February 1, 2022
Apart from this, a TDS at the rate of 1 per cent is also set to be imposed on the transfer of Crypto assets. This will hold for transactions that cross a certain threshold. In case you are gifting someone Crypto assets, the tax will be imposed on the recipient. Nishchal Shetty, founder and CEO of WazirX, has welcomed the Crypto Tax, stating that it brings clarity on the matter. He felt that overall, this is a positive outcome for the Crypto industry in the country because levying a tax “legitimises” the industry to a certain extent.
India has a huge Crypto market with over 10 crore investors. According to a study published by WazirX and Nascom, the investments in Crypto by Indians could reach $241 million by 2030. Some experts had earlier fixed on the 30 per cent figure for Crypto tax, stating that it should be imposed on the sale of Crypto, much like the case of game shows and lotteries.
In today’s Budget speech, Sitharaman also announced the introduction of India’s own digital rupee that will be launched by the Reserve Bank of India. This central digital currency will be introduced using blockchain.