Cryptocurrency News: The government proposed a Central Bank Digital Currency or Digital Rupee, to be issued by the Reserve Bank of India (RBI). This will be based on Blockchain Technology.
New Delhi: Budget 2022 introduced new and interesting regulations for digital assets. The step came as a surprise to many after the government postponed the introduction of the Cryptocurrency Bill in Parliament. The bill was to be introduced during the Winter session of the parliament. But this was postponed due to a lack of consensus. However, the government introduced two interesting steps related to digital currency in Budget 2022.
Firstly, the government proposed a Central Bank Digital Currency or Digital Rupee, to be issued by the Reserve Bank of India (RBI). “Introduction of Central Bank Digital Currency (CBDC) will give a big boost to digital economy. Digital currency will also lead to a more efficient and cheaper currency management system. It is, therefore, proposed to introduce Digital Rupee, using blockchain and other technologies, to be issued by the Reserve Bank of India starting 2022-23,” Sitharaman said in the Budget Speech.
Secondly, the government has introduced a 30 per cent tax on the income from the transfer of digital assets. Also, a TDS of 1 per cent will be charged on transactions above the monetary threshold. “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”, FM said.
‘CBDC, Most Significant Announcement’
Roopali Prabhu, CIO and Co-head of P&S, Sanctum Wealth, believes that CBDC is the most significant announcement of the Budget. She also believes that the introduction of a tax on digital assets will pave way for the legality of cryptocurrencies.
She said, “The announcement of a digital rupee certainly comes as a surprise to many. While there are several economies evaluating the launch of their own central bank digital currencies (CBDC), India would be one of the first to announce and officially launch its own. A CBDC, we would argue, is the most significant announcement in the budget that could impact the future of banking. The budget also introduced a tax on digital assets and has preceded the tabling of the cryptocurrency bill. This could pave way for the acceptance of cryptocurrency as a new asset class.”
Welcome Step
Another industry expert, Arun Pandey, Co-founder, Beyondlife.club, too believes that the step is a welcome move.
He said, “ It has been the industry’s request for some time to bring digital assets and currency in the regulatory framework and it is heartening to note that the Hon’ble FM and Hon’ble PM have recognised the sector. Taxation and TDS on Digital Assets have come as a sudden move for the industry. It might hit user sentiments in the short term, however, we shall see how the ecosystem evolves in the country and are committed to work as per the rule of the land.”
