Budget 2022 Financial News

Responding to questions posed around Union Budget 2022, particularly around cryptocurrency taxation and legalisation in the Rajya Sabha, FM Nirmala Sitharaman clearly noted that while the "profit emanating from transactions associated to cryptocurrency has been taxed, nothing has been done, at the moment, to legalise, ban or de-legalise it".

By Pratik Gauri, CEO & Founder, 5ire The Indian business ecosystem pinned its hopes on the Union Budget after thousands of small and medium enterprises were severely affected by the ongoing pandemic, especially the devastating second wave and the (diminishing) third wave. Among those who were hopeful were crypto investors and enthusiasts, who feared significant losses due to the uncertainty regarding the stance the Indian government was likely to take on recognising and regulating cryptos. On February 1, those hopes for recognition weren’t dashed as Finance Minister Nirmala Sitharaman announced that digital assets would be doubly taxed in terms of gains as well at the source.

The government has begun the process of preparing the blueprint of a new set of reforms necessary to improve the ease of doing business, as announced by finance minister Nirmala Sitharaman in her budget speech on February 1. The next phase of reforms will specifically focus on strengthening production and easing supply chains, and have a dedicated segment focusing on 'ease of living'.

Finance Minister Nirmala Sitharaman looked to retain the government's focus on capital expenditure by setting aside a mammoth Rs 7.50 lakh crore for the same for FY23. However, questions have been raised about the nature of this target: is it realistic, overstated, or just a huge challenge?

New Delhi: India could widen the definition of virtual digital assets to cover any new such assets that may emerge and also further refine the provision to tax these assets. The budget for FY23 announced last week proposes to tax any income from the transfer of any virtual digital asset at a flat 30% rate. The provision will be applicable from April 1, 2022. The government could fine-tune the provisions proposed in the budget to tax virtual digital assets after discussions with the industry and to account for the dynamic nature of the sector, officials told ET.

Arvind Laddha

Finance Minister Nirmala Sitharaman while addressing a post-Budget interaction with industry body FICCI,  assured that India's economic recovery is going to place it as the fastest growing economy amongst others.

Finance Minister Nirmala Sitharaman on Tuesday did not hand out any major tax benefits for individual tax-payers during her Budget announcements.

When the six members of the Reserve Bank of India’s monetary policy committee (MPC) huddle next week to vote on rates and the stance, the big question to address would be whether the Union Budget has materially changed the macroeconomy to warrant a shift in stance.

Mumbai: The worldwide crypto community has lauded India’s announcement to tax cryptocurrencies and develop a blockchain-based, regulator-backed digital currency as a significant step forward toward legitimising the asset class and encouraging innovation in blockchain technology. «This means that India recognises the importance of crypto, digital assets and their underlying technology, blockchain, too,» said Anndy Lian, Chairman of the Singapore-based BigONE exchange. «The next crypto bull market could be led by India.» On February 1, Finance Minister Nirmala Sitharaman announced the government would impose a blanket tax rate of 30% on the transfer of «virtual digital assets.»

Sidharth Sogani

The broad definition of «virtual digital assets» and «any information, code, or otherwise» in the newly announced framework could cover a large range of intellectual properties and even online assets created by multinationals, as per the experts. This could eventually mean that taxmen may be able to question certain assets or intellectual properties, and they could eventually be taxed at a higher rate.

The crypto industry is having mixed sentiments after the finance minister announced a 30 percent tax on income from cryptos and other virtual assets. In a panel discussion held by Moneycontrol, the experts welcomed the move but raised a number of concerns on its impact on the industry.

Devarsh Vakil, Deputy Head of Retail Research, HDFC Securities

cryptocurrency bill in Parliament. However, the government has smartly sidestepped on the legality of cryptocurrencies while showing its disinclination to support these, by levying a huge tax burden on those making money from such virtual digital assets, as the Finance Bill has tried to define it. The Finance Bill 2022 proposes to introduce a new phrase called virtual digital assets, which has a very wide definition encompassing all forms of digital assets including cryptocurrencies and non-fungible tokens. It has also added them to the expression “property”. Any transfer of virtual digital assets is proposed to be taxed at a higher rate of 30 per cent. Furthermore, no deductions would be allowed in computing the income arising from such assets, other than their cost of acquisition. More importantly, they have also proposed to tax the recipient of any such asset transferred without any consideration — for example, by way of a gift. It is also pertinent to note that any loss suffered from transfer of a virtual digital asset cannot be adjusted against any other source of income. The Central Board of Direct Taxes also plans to issue further guidelines concerning taxation of virtual digital assets, ironing out any leftover creases.

Mumbai: Tax on cryptocurrencies or virtual digital assets announced on Tuesday is set to create more problems for investors and their tax experts on how to compute gains and taxation. Many tax experts seem to have raised questions about what would happen to the gains made by investors in the past year. That is, whether the announcement on tax will be retrospective. «The concerned amendments are prospective from April 1, 2022. This means that for such transactions till March 31, 2022, taxation should be applicable at normal income tax slab rates or capital gains tax rates (as the case may be) and not the flat 30% rate,» said Sudhir Kapadia, national leader-tax at EY India.

Finance Minister Nirmala Sitharaman announced the tax on gains arising from virtual assets at a flat rate of 30 per cent without any exemptions or deductions. The high rate of taxation and high volatility in crypto tokens has raised a few logical questions in the investor community.

The Budget announcement of taxing 'virtual digital assets' or crypto currencies will help the Income-Tax department measure the "depth" of this trade in the country, know the investors and the nature of their investments and it does not "attach any legality" to these transactions, CBDT Chairman J B Mohapatra said.

"They are in a grey area. Its not illegal to buy and sell crypto," Finance Secretary TV Somanathan said.

income tax on digital assets, that would include cryptocurrencies and Non-Fungible Tokens (NFTs), this is set to spark a sell off from Indian investors, say industry trackers. The finance minister on Tuesday introduced a 30% income tax on returns from digital currencies. This would mean that investors will have to cough up 30% tax on the returns they make from trading or investing in cryptocurrencies. Experts say that the 30% tax would also not be allowed to be set off against any other losses or expenses. This is only going to increase the tax burden for cryptocurrency investors, who will have to shell out a third of their returns towards taxes.

fad across the world and India will next fiscal, beginning April 1, have its own version of the same which essentially would mirror the prevalent physical currency in digital form. The currency, called 'digital rupee', will be issued by the Reserve Bank in digital form and will be fungible with physical currency. The exact regulation governing this Central Bank Digital Currency (CBDC) is yet to be finalised.