The Indian Ministry of Finance clarified in parliament how the government plans to tax cryptocurrency transactions under the India Finance Bill. The legislation, which includes proposed rules on taxation of cryptocurrencies, is scheduled to be passed in parliament tomorrow.
A proposed new section to the Income Tax Act states that earnings from cryptocurrency transactions will be taxed at 30%. They also include a 1% withholding tax, and no loss compensation.
“According to the proposed article, any VDA transmission income will be taxed at the rate of 30%.”
According to the finance minister, in the proposed law, infrastructure costs incurred in mining cryptocurrencies can be treated as acquisition cost and therefore deductions will be allowed.
Although the taxes of the new proposal are relatively high and strict, the regulation of cryptocurrencies in India is extremely positive for the entire market. Not long ago it was expected that cryptocurrencies would be banned from the country, with the regulated market and legal clarity finally the industry will be able to mature in the country.