Finance Minister Nirmala Sitharaman completed her report on the Union Budget 2022. Many of the expectations all of us had, in terms of tax relief for personal income and tax deductions that would be increased for life insurance and health insurance, expanding the electric vehicle sector, and so on, haven’t been discussed in the current Budget.
Beyond the other information, there were some crucial points that could impact your financial situation. Let’s look over these announcements.
Tax on Digital Assets (Crypto)
A major negative setback to India’s growing crypto sector, the Finance minister has announced that all income generated by the exchange of digital currency (crypto) is going to be subject to 30 percent tax in addition to TDS on any payment related to the transfer of digital assets at the rate 1 percent of such consideration over a certain amount.
“The size and regularity of these transactions have forced the need to create an appropriate tax system,” she said.
The central bank of India will introduce a digital currency within the coming financial year, she added.
The central bank of India was trying out the CBDC through a series of controlled tests over the past few months in the country and is investigating its effects on financial and banking systems.
“Introduction of central bank digital currency could give a major boost to the digital economy. Digital currency can also create a more effective and cost-effective money management system,” she said.
In a press release, New Delhi said its digital currency Central Bank will be treated as notes from banks.
With the introduction of an income tax system for cryptocurrency-related transactions, New Delhi appears to be issuing a certificate of recognition for these virtual items as legitimate tender or, as one investor wondered in a loud voice, “take their pound of flesh from the activity.”
Digital Rupee is to Be rolled out in the upcoming Financial Year 2022-23
As a major boost to the economy and the digital India program, The Finance Minister has made it clear that Central Bank Digital Currency (CBDC), i.e. digital rupee, will be launched as a currency issued by RBI in the coming fiscal year 2022-23.
The process will be carried out by using blockchain technology and other techniques. Digital currency is anticipated to be less expensive and more efficient management of currency systems.
This is in the midst of a lengthy war waged by the RBI against cryptocurrency and the emphasis on introducing the country’s own currency following a series of times when it expressed serious concerns about crypto’s threat to the country’s financial stability.
New Delhi also pledged to expand the reach of digital banks and the internet in rural areas of the country.
Let’s look over some reactions to these new updates on Digital Payment: