Like other countries preparing to launch their digital currencies, India is developing the digital rupee. In addition to its token, the government is preparing to tax cryptoasset transactions.
According to a recent statement from India’s finance minister, Nirmala Sitharaman, the country’s digital currency will be classified as a stablecoin and have its value pegged to the rupee.
Unlike cryptocurrencies like bitcoin, which have a decentralized network, India’s digital asset will be controlled by the country’s central bank and known as a CBDC.
According to the project, India’s official digital currency will be launched in less than two months, on April 1, 2022. Like China, which is developing the digital yuan, India is preparing a digital version of its fiat currency.
Although it has declared an opening to the crypto market, India is set to launch a tax for transactions with digital currencies. As the proposal states, transactions involving cryptoassets will be taxed at 30% by the country.
Close to enacting tax legislation for the crypto market, India is also planning to levy a 1% withholding tax on all transactions with digital currencies. In addition, anyone receiving donations in cryptoassets will be subject to the new tax. In this case, the tax collection will be done through the recipient.