[CLUB100] Positive News for Steem and Indian Users - India's Finance Budget 2022

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Namaste Steem Family,

I am feeling so happy and excited to bring this news to our Steem family. This news is about the acceptance of cryptocurrencies in my country, a country with more than a billion people. Most people are now turning to the internet and blockchain technologies for earning money or running their businesses.

I will first be sharing the news of what was announced in the Finance budget presented to the common people by our Finance minister, Mrs. Nirmala Sitharaman.

Then, I will be sharing what are the consequences of this budget and what benefits we Indians are going to get from this budget, and most importantly, how Steem is going to benefit from this budget.

Yes, you read it right. Steem is going to benefit from this budget. Those of you who want to read how this is going to happen can skip to the last section of this post.

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TL;DR

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1. The government of India has acknowledged the existence of cryptocurrencies, as well as other virtual assets that use blockchain technology, after recognizing it as a taxable asset in the latest budget session.

2. Considering that an illegal asset cannot be taxed by the government of a country, it is quite a relief to learn that Indian authorities have considered cryptocurrencies as a legitimate source of income for their citizens.

3. From the beginning of April, there will be a 30 percent tax on all cryptocurrency-related speculative trades. The tax will go into effect on April 1st, 2022.

4. We are talking about a tax that will be imposed in the same way as the tax on gambling winnings from horse races or other such speculative transactions that are currently being executed in the country.

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Now, let us go through the details of this story.

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Well, I am happy to report that during the address of Budget 2022 on the first day of February, Finance Minister of India, Nirmala Sitharaman made an unexpected announcement. Sitharaman has announced that the income from investments in "virtual assets" will be taxed at 30%, and on top of that one percent TDS (tax deducted at source) will also be deducted from these investments.

This is a step towards keeping the country with the global trend toward virtual financial instruments.

According to the federal government, a virtual asset consists of any financial instrument developed by cryptographic means, which has a digital representation. The general conclusion may be summarized by saying that almost all private cryptocurrencies may be considered virtual assets.

Although the 30% tax is essentially a retributive tax, aimed at discouraging people from dealing with these kinds of assets, the Indians have been collectively investing in crypto assets more than what other countries’ investors are investing in this space.

Previously, cryptocurrency and virtual asset trading faced the possibility of being banned entirely across the country, so the fact that the cryptocurrency industry has been approved to operate is a blessing for an industry that was once in danger of becoming inoperative due to a federal ban.

Even though Sitharaman's Budget statement focuses heavily on the tax rate, the most important thing that stands out is the fact that crypto-assets are now being recognized by the Indian government. Cryptocurrencies have been recognized by the government as tax-deductible assets and the government has officially acknowledged their existence along with other forms of cryptocurrencies.

However, they may still be subject to legal challenges in the future concerning their legality. From a logical standpoint, how can the government tax something that is illegal?

You can read the summary of the full budget speech using this link:

Speech Summary by Press Information Bureau

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There will be a separate column on the form of the income tax return for making disclosures on cryptocurrencies and paying taxes on any gains made

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During an interview, Revenue Secretary Mr. Tarun Bajaj stated that gains from cryptocurrencies were always taxable, and what is being proposed with the Budget isn't a new tax but providing certainty about the issue of uncertainty in the space. The purpose is to provide clarity and certainty to the taxation of cryptocurrencies.

It is expected that the government will draft legislation to regulate cryptocurrencies in the near future, although no draft has been released to the public yet.

As a result, a central bank-backed digital currency is scheduled to begin circulation in the next fiscal year, which will make currency management more affordable and efficient.

With regard to the applicable cesses and the 15% surcharge on income over 5 million Rupees, 30 percent has to be paid on cryptocurrency income, he explained, adding that a separate column on the income tax return form will be added for declaring gains from cryptocurrencies. The taxpayers will be required to disclose their holdings in this form.

Further, in the budget speech, Finance Minister mentioned that no deduction shall be allowed for any expenditure or allowance relating to transactional income derived from the sale or transfer of such assets. The bill has also specified that losses that arise from transferring digital assets will not be permitted to be offset against any other income generated by the business.

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Now, let us understand how this news is going to benefit the cryptocurrencies space and more importantly how it is going to benefit Steem in particular.

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The budget announced by the Finance minister mentions that the taxpayers will be paying 30 percent tax for any profit that is realized from investment in any digital asset, may it be cryptocurrencies or NFTs (Non-Fungible Tokens).

One key point to pay attention to from all this is that an individual has to pay tax on these assets only if and only to the extent that the individual realizes profits from their investments. Therefore, taxpayers will not be required to pay taxes on any transaction that is still pending, which means that the tokens owned by the investor have not been sold on the market yet.

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This is going to be a huge news for Investors from India who are on Steem. How?

Let me explain. Steem has already been experimenting with the #club5050, #Club75, and #Club100 tags, and people have also shown a great interest in this. If more people from India participate in these tags and keep their tokens on the blockchain rather than selling their earnings on any exchange, then they will not have to pay any taxes on their earnings.

As a result, Steem's blockchain will have more investors staking and fewer people withdrawing funds. In the long run, this will result in Steem's value skyrocketing.

Therefore, I would urge all the Steem members from India to participate in the #Club100 tag and keep their tokens on the blockchain.

I am an optimistic person and I believe that within one year, we are going to have more investors on Steem from India and more people participating in the #Club100 tag.

Speech Video by Finance Minister Nirmala Sitharaman YouTube Video

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