#TaxPolicy
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Taxation of Cryptocurrencies in India: Evolving Landscape and Legal:-
Cryptocurrency is a popular investment vehicle, but cryptocurrency taxation is contentious and uncertain among Indian investors. The government's move to tax cryptocurrencies through a flat tax on cryptocurrency profits has questioned its impact on investment patterns and compliance.
INTRODUCTION :
Cryptocurrencies have arrived as a disruptor of the global financial system, flipping traditional monetary systems, regulatory environments, and taxation regimes on their head. As conceived in their original guise as decentralized digital tokens free of central controls, cryptocurrencies such as Bitcoin, Ethereum, and others have gained phenomenal traction among investors, traders, and businesses worldwide. India, which has a rapidly expanding digital economy, has experienced unprecedented growth in the use of cryptocurrencies, precipitating with it pressing questions of taxation, regulation, and legal status. Taxation of cryptocurrency in India is a confusing scenario since they are not included in traditional finance assets. They do not quite fall into other tax categories, and hence, it is difficult to categorize, report, and administer. Due to this, this background, the Indian government has prescribed a format for taxation purposes to introduce digital assets into formal taxation. The Union Budget 2022 also introduced a uniform 30% tax on VDA income and 1% Tax Deducted at Source (TDS) for above ₹50,000 transactions (or ₹10,000 in a few instances). These reforms are a move towards regulating the growing digital asset market and making taxation easier.
