3. What are your views on the recent budget announcements on taxing transactions in cryptocurrencies? Substantiate your views. (15 Marks)
क्रिप्टोकरेंसी में लेनदेन पर कर लगाने पर हाल की बजट घोषणाओं पर आपके क्या विचार हैं? अपने विचारों की पुष्टि करें।
Approach-
Candidates need to substantiate his views on budget announcements on taxing transactions in cryptocurrencies.
Introduction–
The Union Budget 2022 has finally brought in a lot of clarity on how cryptocurrency will be taxed from Financial Year 2022-23. Removing all doubts on whether cryptocurrencies would become a legal tender or a medium of exchange in the future or not, the budget clarified that the Government of India doesn’t consider cryptocurrency as a currency, but shall treat it as a virtual digital asset. In other words, the Government of India would treat cryptocurrency as an investment.
Body
Taxing Transactions in Cryptocurrencies
Conclusion
The tax department is entering into the digital or virtual asset side at a time when the policy itself is being worked out so this is certainly the right time for the department to have entered the market. Only legislation will help us in knowing as to who is investing, how much is being invested, the quality of the investment, the nature of investment and whether people are making profits or losses.
