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On the sidelines of an event on Monday, Economic Affairs Secretary Ajay Seth said that inflation in India should moderate in coming months and the Centre is ready with its consultation paper on cryptocurrencies.
He further said that there needs to be a global consensus reached on cryptocurrencies and India would look at regulations enforced in other nations before deciding how it would regulate.
In the annual budget 2022-23, the Centre said it would tax gains made through cryptocurrency investments at 30% but the country has still not given the measure legal status.
India distinguishes between cryptocurrencies and crypto assets, and Union Finance Minister Nirmala Sitharaman, during the Union Budget, said the 30% tax on income from these transactions will include a 1% deduction at source.
Her proposal of levying a 30% tax on crypto earnings came into effect on 1 April.
The goods and services tax (GST) council is also mulling a 28% tax on cryptocurrencies, at par with the current GST on casinos, betting and lottery.
The services such as crypto mining along with sales and purchases are likely to attract the 28% GST if the proposal goes through in the next GST meeting, reports stated.
The 28% GST will be in addition to the 30% income tax on earnings from crypto asset transactions.
There is also a 1% TDS (tax deducted at source) on transactions in such asset classes above a certain threshold. Gifts in crypto and digital assets are also taxed.
A new section called '115BBH' has been added in the Income Tax Act, 1961, to tax digital assets.
During a trip to the US, FM Sitharaman raised doubts about the size of the cryptocurrency market worldwide and stressed the need for a regulatory mechanism acceptable to all countries to prevent its use to launder money and fund terrorism, which, she said, were big concerns for India.
Bitcoin rallies above $30,000
Bitcoin was finally showing some signs of life Monday after being stuck below the key $30,000 level for four days, and other cryptocurrencies were following suit.
The largest cryptocurrency climbed for a third day, breaking above $30,000. It jumped as much as 4.4% to $30,441.43.
While Bitcoin’s dominance has been increasing recently, some altcoins were outperforming, with Avalanche up 6.6% and Cardano gaining 8.6%.
Ether gained as much as 6.6% today while Solana was up 6%. Luna, the new token distributed to investors who saw the value of their cryptocurrencies tied to the Terra blockchain wiped out earlier this month, fell 1.2% as per CoinGecko, making it an outlier among altcoins.
