The Reserve Bank of India will issue a new digital rupee using blockchain and other technologies during the financial year 2022-]23, Union Finance Minister Nirmala Sitharaman announced on Tuesday while presenting the Union Budget.
“Introduction of a central bank digital currency will give a big boost to the digital economy,” Sitharaman said in her speech. “Digital currency will also lead to a more efficient and cheaper currency management system.”
The government also announced a 1% tax deduction at source on payments for the transfer of digital assets. Further, Sitharaman said that the recipient of gifts of cryptocurrency assets will also have to pay a tax.
The minister also announced that a tax of 30% will be imposed on any income from the transfer of digital assets. This will have an effect on gains from cryptocurrency and non-fungible tokens.
However, the digital rupee will not be taxed at 30%, Sitharaman said at a conference after the Budget, India Today reported.
“We are not taxing currencies as crypto are not currencies,” she said. “They cannot be as currency can only be issued by the central bank. Everything else are assets created by individuals and we are taxing profits made out of transactions of those assets, at 30%.”
On November 23, the Union government had said that it will introduce a Bill to ban all private cryptocurrencies in India and introduce an official digital currency issued by the Reserve Bank of India.
However, the Cryptocurrency and Regulation of Official Digital Currency Bill was not among the 15 proposed legislations expected to be taken up by Parliament, according to The Times of India.
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