Finance Minister Nirmala Sitharaman has clarified that the Narendra Modi government is only taxing the profits made on digital assets. Earlier in the budget speech, the FM announced a taxation scheme on virtual digital assets such as cryptocurrencies saying that any income from the transfer of any virtual digital asset shall be taxed at the rate of 30 percent.
"What we have now made a provision for is for the Reserve Bank of India (RBI) to issue a digital currency. And that obviously will be reverted in or based on certain value of gold or money or governments’ assets or something of that kind. So it will be asset-backed, it will be sovereign backed in a way. So that is what is currency. The rest of them, we don't know yet how we are going to regulate them, because consultation is going on," she said.
"However, because there's a lot of buying and selling and transacting resulting in some kind of a profit and it is the sovereign right to tax such transactions and profit-making, I have come up with a proposal for a taxation on them. And that is to the extent of 30 percent for profits earned out of such taxation, and also a TDS. So that I know who is buying and selling in the sense what is the transaction about money trail, whether it is A money or B money, whatever. So the taxation is on those activities, which are not currencies with the RBI, but these are some kind of assets being bought and sold - various types of it. I am taxing them," she added.
Sitharaman said that the consultation process regarding cryptocurrencies was ongoing and regulations will follow. Meanwhile, a provision has been made for the RBI to issue a digital currency (CBDC).
"Everything that is crypto, cannot be a currency. A currency is something which is issued by the authorities concerned, the government or the central bank. If they issue something, even if it's digital, only then can it be currency," she said.
Also Read: Budget 2022 | If you're making money on crypto sales, I will tax you: Revenue secretary Tarun Bajaj
The Finance Minister also said that giving a timeline for the completion of cryptocurrency consultations was difficult at this stage.
Addressing queries regarding Budget 2022, the FM said in an interview with Doordarshan that the manufacturing and the services sectors should see a spurt in growth.
The Finance Minister said that various states have shown interest in large projects with an immediate impact on employment. Further, the production linked incentive scheme (PLI scheme) will be expanded further.
"Government’s conservative estimate is that only through PLI scheme, 60 lakh jobs will get created," she said.
Sitharaman also reiterated her government's commitment to boosting farmers' income and added that the government has offered the highest MSP (minimum support price) over the past few years.
"We are working on several measures which will ensure farmers’ income doubles," she mentioned.
For the full interview, watch the accompanying video
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