Additionally, there will be a 1% tax deducted at source which means the seller gets the proceeds less by that percentage in a transaction. To add to crypto investors potential tax bills any losses in digital assets transactions cannot be squared against profits in other investments that reduce the tax liability.
India’s Finance Minister Nirmala Sitharaman made the announcements to that effect when she presented the government’s federal budget for the financial year beginning 1 April. In a sign of Indian authorities attitude towards crypto investing Sitharam likened the profits from this sector to those from gambling and horse-racing.
Prior to the budget there was speculation India could impose a complete ban on such transaction, like its regional rival China. However, the government’s announcements of taxing income from cryptocurrency transactions means the new-age digital currency is legal which could increase investor appetite for the asset class, despite the tax.
Cryptocurrency trading platforms have for long struggled in India to gain recognition and advance. Despite the presence in India for nearly a decade, not more than 25 million out of a 1.4 billion populated-country are active users of any cryptocurrency platform.
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