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In the Indian Parliament, the Indian Finance Minister Nirmala Sitharaman stated that taxing cryptocurrencies does not give them legal status. She stated that taxing “Virtual Digital Transactions” is the sovereign right of the Indian government. The Finance Minister stated whether or not India will ban cryptocurrencies is something that India will decide after due consultations.
The 30% tax thing about crypto in India made it to the news already. Thus, India has introduced tax on “virtual digital assets” and also non-fungible tokens (NFTs) they have also announced that the 1% tax deducted from source on asset transfer will come with a certain threshold.
The crypto bill is yet to be discussed and it is likely to be different from the previous 2019 crypto bill proposal.
Shaktikanta Das, the RBI governor is not able to recognize any merit in cryptocurrencies. He states that cryptocurrencies do not have any underlying value and stated that it is not even worth a single Tulip. However, it looks like the digital Rupee will carry the liability of the RBI like they do for their paper currency (INR).
During the Monetary Policy, press conference on February 10, 2022, the RBI governor expressed his apprehensiveness over cryptocurrencies by stating, “Private cryptocurrencies, or cryptocurrencies, which have currency-like characteristics, will undermine RBI’s ability to deal with issues of financial stability.”
“The digital rupee will be a convertible to paper currency at a 1:1 ratio.” Reportedly, the only difference between the CBDC and paper notes will be that one is digital and the other is physical.
It does not look like the RBI has any kind of empathy towards cryptocurrencies. Investments in crypto are subject to their personal risk and the government does not seem to offer any kind of protection.
However, the common people in India when hearing about the 30% tax believed that It’s only going to lead to mass adoption. And, considered that taxing is a great sign from the government of India.
Some of them also thought that if all crypto is legally recognized with a 30% tax in India, then it can mean that technically, crypto will fulfill the definition of “fiat” as Crypto might get assigned a value by a government via law for the purposes of paying taxes.
However, the governor did not assign any new value to the Indian Digital Rupee. It is not expected to be volatile either. The Digital Rupee has the same value as the paper form of the money.
