India to Launch Its Own Central Bank Backed Digital Currency Soon

Upholding the interest of millions of cryptocurrency fans in India, India on Tuesday announced legalizing the virtual currencies for good.

The nation in it’s Union Budget 2022-23 session announced a 30% tax cut on income made through virtual assets transactions. Also, the country’s Finance Minister unveiled plans for launching a digital rupee, backed by India’s Central Bank later this year.

Legalizing Cryptocurrencies in India

India to Launch Its Own Central Bank Backed Digital Currency Soon

For a long, India has been adamant about regulating cryptocurrencies in the country. This is because of the general reason every other government talks about – they’re fuelling the cybercriminal activity. While it’s true in most cases, they’re still legitimate projects some cryptocurrencies are serving, and people are cautioned about dealing in them.

Since the traders aren’t interested in dumping this new technology, India has finally decided to regulate them. On Tuesday, the nation’s Finance Minister in Union Budget 2022-23 announced a flat 30% tax rate on income from trading cryptocurrencies.

She also specified that there will be no deductions and no exemptions will be allowed. Also, there’s a 1% TDS cut payments made for the transfer of digital assets. The FM has also said that one cannot offset the tax losses recorded from one transaction to other, which is a profitable one.

And, the cryptocurrency gifts will be taxed on the hands of the recipient. Talking about the increase in the number of cryptocurrency transactions, the Finance Minister has also announced plans for launching a Central Bank Digital Currency (CBDC) for India, which will be backed by RBI, the nation’s central bank.

This is similar to Chinese Digital Yen, which is regulated by the government and is not decentralised. But, it will be based on blockchain technology, and the digital wallets that hold and process these transactions will be created.

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