India disclosed that it made more than $19.2M in tax after new rules subjected income from crypto transfers to a flat tax rate of 30%.
According to the Union Finance Ministry, tax collected at source on payments made upon the transfer of virtual digital assets totaled $19.2 million for the fiscal year up to March 20, 2023.
India’s Heavy Crypto Tax Collections
During the Union Budget 2022–2023, Finance Minister Nirmala Sitharman proposed imposing 1% TDS on cryptocurrency transactions. This was in addition to a 30% tax on the income from these transfers.
The 30% tax legislation went into effect in India on April 1 under section 194S of the Income Tax Act of 1961, and the TDS levy was implemented in July 2022.
The government’s direct tax collections aggregated to Rs 157.9 crore (~$19.2 million) up to March 20. When questioned about the specifics of the government’s tax revenue from cryptocurrencies, the ministry revealed the numbers.
Web3 Plan Ahead for India
At a recent event, India’s Minister of Information Technology, Rajeev Chandrasekhar, declared that India doesn’t want to stifle innovation. However, he prioritized safeguarding security and intelligence objectives while ensuring ease of doing business and living.
Concerning crypto, the official said, “I do not think we are uncomfortable with anything.” Chandrasekhar added,
“I just want to be very clear on that and our approach or our response to a sector is not based on comfort, discomfort, as much as harm, legality, illegality. That is the prism around which we view areas that we need to focus on, legislate on.”
That said, Chandrasekhar emphasized that the Indian government has a very distinct position on all matters relating to the internet, including web3 and blockchain. He claimed that the government is very encouraging of any innovation.
On the other hand, the minister said, “We have no problems on anything to do with blockchain. But certainly it is RBI’s case that crypto represents a macroeconomic risk.”
Crypto in India ‘Not Illegal If Regulated’
India’s central bank has often highlighted potential financial stability risks that crypto could pose while recommending an umbrella ban on the asset class.
Chandrasekhar had previously claimed there is no issue with cryptocurrency trades in India if all rules are followed. He made it clear that buying cryptocurrency through reputable means wouldn’t be against the law. Maintaining his position, he said this time that governments are being careful due to the ongoing market uncertainty.
The IT minister stated, “Just because it sounds like an innovative, fashionable thing to do, we should not be rushing headlong into saying crypto is right and crypto is good.”
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