Government sees revenue opportunities in crypto: Finance Minister

A month after the budget announcement, Finance Minister, Nirmala Sitharaman on Tuesday said she sees possibility of revenue in crypto. Addressing a question raised by CoinSwitch CEO Ashish Singhal on the future of cryptocurrency, Nirmal Sitharaman said, "People see future in crypto, I see revenue possibility in it."

Speaking on the issue of legalising cryptocurrency in India at the India Global Forum, Sitharaman stated the consultation on crypto is ongoing. Post consultation and going over the legal requirements, the government will discuss if crypto needs to be regulated.

Presenting her 4th straight budget in February, Finance Minister Nirmala Sitharaman had stated, “There has been a phenomenal increase in transactions in virtual digital assets. The magnitude and frequency of these transactions have made it imperative to provide for a specific tax regime."

“Accordingly, for the taxation of virtual digital assets, I propose to provide that any income from transfer of any virtual digital asset shall be taxed at the rate of 30 per cent”. This means that all the transactions in cryptocurrencies, NFTs, and all other digital assets, and the resulting capital gains from it, will be the subject of taxation.

For capital gains, the government will charge a 30% tax, and for all transactions, a 1% TDS will be deductible.

Moreover, the government will also charge a tax for any gifts of virtual digital assets. The tax slab has not been specified yet, however. The finance minister said, “Gift of virtual digital asset is also proposed to be taxed in the hands of the recipient."