Why India Is Placing a 30% Tax on Income from Digital Assets
As technology keeps evolving, the number of ways through which people can find work and make money keeps rising. Such is the case with cryptocurrencies and NFTs, which are also known as digital assets.
Recently, India announced that it will likely place a 30% tax on income from these digital assets and the proposition was faced with some backlash, especially from traders who make most of their living by investing in crypto.
Many are wondering why the country is placing such a high tax on digital asset income. Here now, is the explanation.
India Finally Recognizes Cryptocurrencies
On February 1st 2021, Finance Minister Nirmala Sitharaman shed light on the Indian budget for 2022–2023 and noted that there’s a “phenomenal increase in transactions in digital assets”. She further stated that as the number of Indian residents who invest in these assets increases, it was vital for the industry to be regulated.
By placing a 30% tax on crypto income, India is signaling that it will finally recognize cryptocurrencies as a legal tender, which is a huge development. Recently, El Salvador became the first country to do so as it fully legalized Bitcoin and even invested in the said digital asset. Some traders consider this development as a way to rob them of their money, though.
It is also highly likely for the central bank of India to introduce a digital currency, which is said to provide the digital economy with a big boost. Additionally, it can lead to a cheaper and more efficient currency management system.