India announced plans to begin taxing income from digital assets on Tuesday, while also setting out plans for the launch of its own digital currency.
The Indian government unveiled a tax of 30% on the sale of crypto assets in a move that brings more clarity to the regulatory and tax treatment of cryptocurrencies following months of uncertainty about their legal status in the country.
“There’s been a phenomenal increase in transaction in virtual digital assets,” Finance Minister Nirmala Sitharaman said in her annual budget speech on Tuesday. “The magnitude and frequency of these transactions have made it imperative to provide for a specific tax regime.”
Sitharaman also announced plans for an Indian central bank digital currency (CBDC) that will be launched in April. The country’s central bank – The Reserve Bank of India (RBI) – has been working on a phased implementation strategy for the CBDC.
Among the rules for the tax treatment of digital assets are that losses from the sale of crypto assets cannot be set off against any other income, and digital asset gifts will be taxed in the hands of the recipient.