The Union Budget 2022 proposed heavy taxation on the
income generated through digital assets and cryptocurrency. Concerns of the
crypto investors have further increased as the government is looking on
imposing a retrospective tax on cryptocurrencies for the ongoing fiscal year.

The crypto transactions done before April this year will
not be tax-free as believed by some said the Central Board of Direct Taxes
(CBDT) on Thursday.

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The taxability of the crypto-currency is certain for this
financial year too. “Crypto investors should know that the transactions are
done before April 2022 will not be tax-free,” CBDT Chairman JB Mohapatra
was quoted as saying by ANI.

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On Tuesday, Finance Minister Nirmala Sitharaman proposed
a 30% tax on transactions in cryptocurrencies. During the last year, there has
been a phenomenal increase in transactions in virtual digital assets and the
magnitude and frequency of these transactions have made it imperative to
provide for a specific tax regime. She also introduced a digital currency to be
issued by the Reserve Bank of India.

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Sitharaman added, “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%”.

Except for the cost of acquisition, no deduction in
respect of any expenditure or allowance shall be allowed while computing such
income.

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Finance Minister said that loss from the transfer of
virtual digital assets cannot be settled against any other income and the gift
of a virtual digital asset is also proposed to be taxed in the hands of the
recipient.

Cryptocurrencies like Bitcoin or Ethereum will never
become a legal tender in India only the digital rupee issued by the Reserve
Bank of India (RBI) would be the legal tender, said finance secretary TV
Somanathan on Wednesday.

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Digital rupee to be launched RBI will be the legal
tender. We can purchase non-digital assets with the digital rupee like we
purchase an ice cream or other things using our wallet or payments through the
UPI platform, Somanathan said while speaking to ANI.

He added that Bitcoin, Ethereum or NFTs will never become
a legal tender in India.

Union Budget 2022: Income from transfer of digital assets to be taxed at 30%

Crypto assets are assets whose value is decided between
two people, you can purchase gold, diamond, and crypto assets, but that value
will not have authorisation by the government. The government does not guarantee
successful investment neither it is responsible if one may lose money, he said.