Union Budget 2022💰

Crypto industry hails breakthrough, Startup founders, investors to benefit, Govt to set up 75 digital banking units, Funding Deals & more.

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Feb 02, 2022

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Budget 2022: Crypto industry hails breakthrough but 30% tax a concern💱

Indian crypto had its breakthrough moment on Tuesday when Finance Minister Nirmala Sitharaman said in her budget speech that income from trading these digital assets would be taxed at 30%.

What this means: Though her announcement doesn’t make crypto legal, it does give official recognition to these digital assets, bringing much-needed validation to the sector.

Here's what Sitharaman proposed in her speech:

Any income from the transfer of crypto is to be taxed at 30%.
No deductions are allowed while computing such income, except the cost of acquisition. Losses can not be set off against any other income.
To capture transaction agents, 1% TDS on purchases (above a certain threshold) made with virtual currencies.
Gift taxes if any will be the liability of the recipient.

Several crypto platform executives said the 30% tax would hurt active traders and could force them to take their business to international exchanges.

Digital rupee: The budget also provided a specific timeline for India's central bank digital currency (CBDC) launch.

Startup founders, investors to benefit from 15% cap on tax surcharge🤑

The surcharge on long-term capital gains (LTCG) tax has been capped at 15% for all listed and unlisted companies, Finance Minister Nirmala Sitharaman said in her budget speech.

This addresses a long-standing demand of new-age companies, which wanted share sales of unlisted firms to be taxed at par with those of listed ones. To be sure, only the surcharge levied on unlisted share sales has been reduced – from 37.5% to 15%. The tax rate remains unchanged at 20%.

ETtech Opinion: 'Digital India Budget' delivers for startups but some issues remain - The Economic Times

The government also extended the tax incentives it offers to new startups for the first three years of their incorporation to four years, taking the pandemic-induced fiscal pain into account.

Sitharaman also said an expert committee would be set up to examine and suggest appropriate measures to boost venture capital and private equity investments in startups.

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Government to set up 75 digital banking units in 75 districts🏦

In a major boost for the digital economy, Finance Minister Nirmala Sitharaman said during her budget speech that the Centre proposes to set up 75 digital banking units (DBUs) in 75 districts across India through scheduled commercial banks.

The finance minister also announced that in 2022-23, all 1.5 lakh post offices will be connected to the core banking system, enabling financial inclusion and access to accounts through net banking, mobile banking and ATMs. It will also allow online transfer of funds between post office accounts and bank accounts.

Sitharaman also said the financial support announced for digital payments in the previous budget would continue in 2022-23.

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