"Taxing
does not automatically bring legitimacy," the finance minister said during
a media interaction after her budget speech.
Here’s
crisp about crypto:
o
A 30% tax on income from crypto assets.
o
Losses can not be set off against any other
income.
o
1% TDS on all crypto transactions above a
certain threshold.
o
Gift taxes, if any, will be the liability
of the recipient.
o
RBI-backed ‘digital rupee’ to be launched
in FY23.
That
said, this was the first time the budget explicitly defined “virtual digital
assets”. Non fungible tokens (NFTs), which we have written about extensively,
also got a mention. The industry has come a long way from just a few years ago
when it was facing down a proposal to imprison anyone holding cryptocurrency
for up to 10 years.
The government has defined “virtual
digital asset” to mean any information, code, number or token, generated
through cryptographic means or otherwise, that provides a digital
representation of value, or functions as a store of value or a unit of account,
and can be transferred, stored or traded electronically.
What’s still unclear:
Here’s what we still don’t know, among other things.
o Whether gains from one crypto can be offset
against losses from another.
o Rules around transferring crypto to
exchanges or private wallets registered in another country.
o
Whether traders can hold crypto as stock in
trade.
o
How crypto-to-crypto trades will be
treated.