Tax laws announced for Virtual Digital Assets (VDAs) may be delayed for full implementation. According to a report, trading volume on crypto exchanges BitBNS and CoinDCX decreased by 37.4 percent and 90.9 percent respectively. In April, a tax of 30 percent was applied on profit from VDA. Since then it has become difficult for crypto traders to make profits. A one percent tax cut on every crypto transaction from this month means that the purchase and deposit of cryptocurrencies will have to pay a one percent tax, adding to the pressure on investors.
The central government believes that a TDS of one percent on crypto transactions will make it easier to track these transactions. This TDS will be levied on VDAs including cryptocurrencies, non-fungible tokens (NFTs) and other metaverse elements. The crypto community has expressed outrage on social media over this additional financial burden. Finance Minister Nirmala Sitharaman recently said that no hasty decision will be taken regarding the law related to crypto. The Reserve Bank of India (RBI) last year asked for a ban on cryptocurrencies. The government says that it will not ban this segment completely.
Central Bank Digital Currency (CBDC) can be launched in the country in this financial year. This will enable people to get more payment options. Work is underway to launch a CBDC in many other countries. Its trial has been started in some countries. RBI has said that CBDC will be linked to the existing monetary policy as well as payment systems. This CBDC will be controlled by RBI and will be created according to the financial structure of the country. A CBDC is a blockchain-based payment solution controlled by a central bank. It works like cryptocurrencies but CBDCs do not have volatility and other risks like cryptocurrencies.
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