Earlier this week, India announced plans for a digital currency to be launched next year. It even proposed to tax virtual assets such as cryptocurrency and NFT as it prepares to accept digital currencies as a legal tender.
Finance Minister Nirmala Sitharaman has said that income from the transfer of any virtual assets will be taxed at 30%. To capture the details of all such crypto transactions, she suggested a 1% tax deduction at source for payments related to the purchase of virtual assets.
Sitharaman said, “When deducting such income, no deduction will be allowed for any expenses or allowances other than the acquisition cost. In addition, the loss from digital asset transfer cannot be offset by any other revenue. The gift of a virtual digital asset is also proposed to be a Bitcoin tax at the hands of the recipient.
The news comes as the country paves the way for cryptocurrencies and NFTs, however, government controls on these assets are still in limbo. Significantly, the Central Bank of India is planning to launch a new digital currency sometime next year. This experiment has already begun, and will continue for months as the country analyzes its impact on the banking and monetary systems.
If you think that the profit after selling an NFT will be less after paying taxes, then there are other ways also to earn money through it. The most effective way to earn more money is to become an NFT developer. On average an NFT developer charges over $100 for an hourly rate. Platforms such as Unremot, Fiverr, Upwork allow users to register themselves and earn from the services they offer.
In addition to providing some clarity on the Bitcoin tax of digital assets, the news also shows the progressive outlook of the Government of India on the legalization of crypto assets.
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