India will impose a tax on cryptocurrency from 2022-2023. The country is giving a green light to cryptocurrency and will not ban the use of digital assets. However, there will be a tax on cryptocurrency.
India's finance minister Nirmala Sitharaman plans to introduce a 30% tax on any cryptocurrency transactions in the country. The decision makes the country's situation transparent, thereby showing what will happen behind the scenes in India.
The cryptocurrency market is experiencing unprecedented popularity in India, and therefore it will not be profitable for the country to close the cryptocurrency market. The introduction of a tax of 30% is a sensible decision to regulate and supervise the cryptocurrency market. It also gives a green light and an entry point for new investors in the country.
The cryptocurrency market in India is one of the largest in the world in terms of turnover. Last year, India was very clear about the cryptocurrency market. The government did not have a clear and verified plan as to what they would do with such a fast-growing sector in their country.
However, institutional investors will know what kind of tax is being imposed on the use of digital assets. The country will be watching the cryptocurrency market very closely, as well as monitoring any questionable transactions or large cryptocurrency inputs/outputs by whales.
Institutional investors were satisfied because they got tax transparency. India did not become a crypto-aggressor like Turkey or China, but took more moderate regulatory measures towards the cryptocurrency market, thus giving a green light to traders.
This has further encouraged India to adopt cryptocurrency legally. Even though the 30% tax is not a small amount, it is already a positive step as the crypto industry will now not be able to be annihilated.
According to finance minister Nirmala Sitharaman, India will soon follow in the footsteps of China which is testing a digital yuan. The country will soon be ready to launch digital currency.