India Proposes 30% Tax on Crypto and NFTs to Clear Out Market for CBDC
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1 February

India is examining whether it should impose a 30% tax on crypto and non-fundgible tokens (NFTs) as the country is gearing up to launch its own central bank digital currency in 2023, The Times of India reports. Indian Finance Minister, Nirmala Sitharaman, said in a statement gift of a cryptocurrency is also proposed to be taxed "at the hand of the recipient," adding that there will be "no deduction with exception of cost of acquisition."

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"Further, loss from transfer of digital asset cannot be set off against any other income," she added.

ZebPay CEO welcomed high taxes in a commentary to Reuters, saying the "positive step" legitimizes the industry and hints at an "optimistic sentiment towards further acceptance of crypto and NFTs." Even though the proposed measures are still in progress, Sitharaman added that the country plans to introduce a central bank digital currency (CBDC) in the next financial year using blockchain and other supporting technology.

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Last December, the Reserve Bank of India (RBI), the central bank of the country, began considering a complete ban on cryptocurrencies. According to sources close to the matter, the central bank made a detailed presentation to the board showing "serious concerns" about how cryptocurrencies affect the macroeconomic and financial stability of India. While details remain undisclosed, one of the sources said the watchdog emphasized the challenge of regulating intangible assets that originate overseas.

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