Proposal for crypto tax policy will be up for discussion in Indian parliament today

• The finance minister of India, Nirmala Sitharaman, will introduce the Finance Bill of 2022 in the Lok Sabha.
• As per the latest Finance Bill, cryptocurrency gains will be taxed at 30%, which is the highest tax bracket.
• The Finance Bill also proposes that the Central Bank Digital Currency “should also be regarded as bank notes”.

The finance minister of India, Nirmala Sitharaman, will introduce the Finance Bill of 2022 in the Lok Sabha, or the lower house, on Thursday. The bill includes proposed rules on cryptocurrency taxation, among other things.

Today, Sitharaman is scheduled to discuss the Finance Bill of 2022 and each of its amendments with the elected member of parliaments in the Lok Sabha. The members will then be voted upon.

As per the latest Finance Bill, cryptocurrency gains will be taxed at 30% – which is the highest tax bracket, and the same rate as lottery winnings. This would be applicable to all “virtual digital assets,” from Bitcoin to Non-Fungible Tokens (NFT) and related earnings.

Besides this, the government of India has also proposed a 1% tax deducted at source (TDS) on payments made in relation to transfer of cryptocurrency.

While speaking at India Global Forum earlier this month, Sitharaman had taken a jibe on the latest crypto taxation as well. On being asked whether she sees the future of crypto in India, Sitharaman said, “Many Indians have seen a lot of future in it and, therefore, I see a possibility of revenue in it.”

The Finance Bill of 2022 also proposes that the Central Bank Digital Currency (CBDC) “should also be regarded as bank notes”. The central bank has been working on the CBDC for the last two years, and it plans to conduct a pilot project soon to develop a proof of concept.

The bill has already been sent to Rajya Sabha, the upper house, for consideration. Since the Finance Bill falls under the category of a ‘money bill’, the role of the upper house would be limited as the members of the upper house are not elected representatives of people.

The suggestions of the upper house may or may not be considered by the lower house.

The bill also proposes amendment to Section 68 of the Income Tax Act, which will put the onus on startups to disclose the source of capital of the creditor they are borrowing from.

Besides this, the Lok Sabha is also slated to take up discussions and voting on demands for grants for several ministries, including commerce and industry; ports, shipping and waterways; and ministry of fisheries, animal husbandry and dairying.

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