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On Tuesday, India announced plans to begin taxing income from digital assets, as well as ambitions to develop its own digital currency.
Following months of confusion regarding cryptocurrencies' legal position in India, the Indian government announced a 30% tax on the sale of crypto assets, bringing more clarity to the regulatory and tax regulation of cryptocurrencies.
"Transactions in virtual digital assets have increased phenomenally," Finance Minister Nirmala Sitharaman said in her annual budget speech on Tuesday. "Because of the magnitude and frequency of these transactions, a particular tax structure is required."
Sitharaman also announced plans for an Indian central bank digital currency (CBDC) that will be launched in April. The country's central bank - The Reserve Bank of India (RBI) - has been working on a phased implementation strategy for the CBDC.
Among the rules for the tax treatment of digital assets are that losses from the sale of crypto assets cannot be set off against any other income, and digital asset gifts will be taxed in the hands of the recipient.