India’s Consultation Paper on Cryptocurrency; RBI DG Statement

Previously Financial Minister of India has announced that capital gains on cryptocurrency and digital assets will be taxed at a flat rate of 30% and 1% TDS on each transaction from 1st April 2022, now here we have a new update regarding this where the Department of Economic Affairs is prepared to share the Consultation Paper on cryptocurrency and RBI DG has shared that they are working on the digital version of the fiat rupee.

Table of Content:

India’s Consultation Paper.
RBI DG’s statement on Digital Assets and Cryptocurrency.

An Update: Recently, the Income Tax department of India has released the tax rates for the assessment year 2023-24 in which they mentioned 0.1% TDS as per section 194s. But later on, Income Tax Department tweeted "Some media reports have come to the notice of CBDT claiming that the rate of TDS on Virtual Digital Assets(VDA) has been reduced to 0.1%. It is hereby clarified that there is no change in the rate of TDS on VDA, which continues to be 1%." So as of now there are no changes in TDS on Cryptocurrency and Digital Assets.

India’s Consultation Paper.

India is “Fairly ready” with the consultation paper on cryptocurrency and will soon come out with a paper for private virtual cryptocurrency, mentioned by Ajay Seth from the Department of Economic Affairs. He further said that in the coming month Inflation in India will be moderated and the Indian Government is almost prepared with the consultation paper.

Ajay Seth also said that it is required for all countries board to work together and the Indian government is going forward to talk with the global regulations on digital assets. He also mentioned that India would look at regulations enforced for cryptocurrency in other countries and then will decide how to regulate cryptocurrency in India.

RBI DG’s statement on Digital Assets and Cryptocurrency.

RBI Deputy Governor T Rabi Sankar has said "Central Bank Digital Currencies can "kill" whatever little case that exists for private virtual currencies." This statement was recorded in a very recent IMF seminar, ‘India’s Digital Payment System & Beyond’.

He has also mentioned that RBI is working “Methodically” to bring in the digital version of the fiat rupee as it will be helpful in managing currency and ease cross-border payments and inter-banking settlements.

Rabi Sankar has further added that RBI is following a procedure to learn this and they understand the digital journey is equivalently important. He said, ”It’s a journey that never has an end.” And in the same, Rabi Sankar also told that they are working on the development of the UPI network and payments.

So according to these reports, the government is planning something by which they can regulate cryptocurrency and digital assets countrywide in a smooth manner and can also store the record of the investors.