India has decided to introduce a digital version of its currency. India’s finance minister declared that they will launch a digital version of the rupee this year. In her annual budget speech, India’s finance minister Nirmala Sitharaman shared the plan for imposing a 30% tax on income from digital assets.

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By this declaration, India becomes the latest major economy that is moving towards virtual currency officially. It is expected that trading or transferring cryptocurrencies and non-fungible tokens help the country to earn the highest tax band. Previously China has initiated its digital yuan. But they had banned the trading and mining of cryptocurrency.

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Ms. Sitharaman mentioned that the magnitude and frequency of digital asset transactions “have made it imperative to provide for a specific tax regime”. Ms. Sitharaman said, “Introduction of a central bank digital currency will give a boost, a big boost to (the) digital economy,” She also added, “Digital currency will also lead to a more efficient and cheaper currency management system.”

Cryptocurrency trader Sumit Gupta said, “A tax rate of 30% is on par with that imposed on gains from speculative activities like a lottery, gambling, and other gaming activities. That proposed 30% might act as a dampener for greater adoption.”

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However, the Reserve Bank of India (RBI) banned the trading of cryptocurrencies in 2018. The bank authority has issued several warnings about the security-related risks related to virtual currencies such as Bitcoin.