Cryptocurrency: Before And After Union Budget 2022
Cryptocurrency is a type of digital or virtual currency that uses encryption to safeguard transactions. These currencies do not have a centralized issuing or governing authority; instead, they rely on a decentralized system for recording transactions and issuing new units.
In fact, cryptocurrency is a digital payment mechanism that does not rely on banks to verify transactions. It is a peer-to-peer payment system that allows anybody, anywhere, to send and receive money. Cryptocurrency payments exist solely as digital entries in an online database identifying specific transactions instead of tangible money carried and exchanged in the actual world. These currencies, in fact, are kept in digital wallets.
Examples of cryptocurrencies are Bitcoin and Ethereum. Bitcoin was founded in 2009 and was the first cryptocurrency. Also, it is now the most commonly traded one. Ethereum was created in 2015. It is a blockchain platform having its cryptocurrency after its name. After Bitcoin, it is the most popular cryptocurrency.
Union Budget 2022
The Union Budget 2022 was announced by the Government of India, with Finance Minister Mrs. Nirmala Sitharaman providing much-needed clarification for millions of crypto investors in India. The government has imposed a 30 percent fixed tax rate on any profits produced by cryptocurrency trade. The Digital Rupee, which is stated to be India's first Central Bank Digital Currency (CBDC) initiative, will be an online version of the Indian currency that will be fully regulated and overseen by the central government. Such currencies typically enjoy the full trust and support of the issuing authority. Furthermore, the Reserve Bank of India will continue to be the guarantor of the Digital Rupee, as it is for normal notes and coins.
Here are some major changes one can see in the Union Budget 2022.
- As per the Budget India 2022, people need to pay taxes on the income generated from cryptocurrency investments.
- Profits from the transfer of crypto assets will be subjected to a flat 30% tax beginning April 1, regardless of the holding term. Crypto earnings are taxed at the same rate as gambling, horse racing, or lottery winnings.
- From July 1, a 1% TDS on payments made for transferring digital assets above a certain monetary threshold would be applicable to track the flow of money. Importantly, losses cannot be deducted from other sources of income.
- Profit from the transfer of virtual assets is subjected to a 30% tax.
- Other than the cost of acquisition, no expenses are deductible besides the acquisition cost.
- Buyers must deduct 1% TDS at the time of purchase.
- TDS compliance may be undertaken through exchanges.
How can one learn about investment in Cryptocurrency?
On various platforms, multiple wealth management courses are available through which one can gain in-depth knowledge about bitcoin, understand the blockchain, do a fundamental analysis on what coins to invest in, etc.
Such wealth management courses in India are educating everyone about all they need to know about cryptocurrency and much more.
What do the government's actions say about digital currency?
Many people have interpreted the steps taken as confirmation of the government's acceptance of the digital currency in Budget India 2022. Others argue that this decision confirms the government's stance against private cryptocurrency as legal tender while offering residents a fiat option. The budget reaffirms India's determination to construct a progressive and technologically advanced future. Although this is not the same as making cryptocurrencies legal cash, the acceptance of cryptocurrencies is a significant step forward.
People believe that this positive attitude toward cryptocurrencies will continue to bode well for the digital rupees and their numerous applications. But for further knowledge, one should enroll in a wealth management course. In fact, a good wealth management course in India will cover the essence and details of cryptocurrency.