India set to launch digital Rupee? Find out what it means for 1.3bn Indians
Money isn’t money anymore. For the uninitiated, it may be confusing, with crypto, physical money, and now a digital counterpart. So what does this mean?
Indian finance minister Nirmala Sitharaman outlined plans for a 30 per cent tax on income from digital assets. It would put profits from trading or transferring cryptocurrencies and non-fungible tokens in the country’s highest tax band.
India is the latest major economy to announce an official virtual currency, as China trials the digital yuan.
“Introduction of a central bank digital currency will give a boost, a big boost to (the) digital economy,” Sitharaman said.
She pointed out that the magnitude and frequency of digital asset transaction have made it imperative to provide for a specific tax regime where profits can be taxed.
“Digital currency will also lead to a more efficient and cheaper currency management system,” she added.
The tax would also apply to gifts of digital assets, with recipients being liable to pay the levy. Taxes for all other transactions would be deducted at the source.
When will India introduce digital currency remains unknown but other countries are also dabbling in the crypto world.
China has been trialling the digital yuan ahead of this month’s winter Olympics and has banned cryptocurrency trading and mining.
In the UK, The Bank of England and the Treasury are exploring a potential central bank digital currency.
Guess, I have to return the physical wallet my grandma bought me for Christmas. What are your thoughts on the move?