Finance Minister Nirmala Sitharaman told about the government’s plan to launch digital currency in the budget presented on Tuesday. He said that the Reserve Bank of India (RBI) will launch a digital currency. It will be launched this year i.e. in 2022. He also told about the tax levied on digital assets. It also explained the difference between digital currency and digital assets. Actually, there is a lot of confusion among people regarding digital currency and digital assets. Let us know about this in detail.
What is the difference between Digital Rupee and Digital Currency?
A currency is considered a currency only when it is issued by the central bank of a country. If a currency is not issued by a central bank, it is not a currency. Cryptocurrency is an example of this. It can be called digital assets.
What are the tax rules on this?
First of all, we have to understand that we are not going to levy tax on the currency which has not been issued yet. RBI is about to issue digital currency. Anything that is excluded from this is the assets created by the individual. And profits from transactions of such assets will be taxed at 30%. Apart from this, 1 percent TDS will also be applicable on every transaction.
Watch the video here:
#WATCH , FM Nirmala Sitharaman speaks on proposed Digital Rupee & cryptocurrencies: What RBI will issue is a digital currency. Everything that prevails outside of it is assets being created by individuals & we are taxing profits made out of transactions of those assets, at 30%. pic.twitter.com/acVOktqosH
— ANI (@ANI) February 1, 2022
What is Digital Rupee?
The popularity of crypto or digital currencies is all over the world. India will have its own digital currency, which will be the digital form of the existing currency, in the next financial year i.e. starting from April 1.
The regulation of Central Bank Digital Currency (CBDC) is yet to be finalised. CBDC is a digital or virtual currency. But it cannot be compared with private virtual currency or cryptocurrency, which has expanded greatly over the past decade. Private virtual currencies do not represent the debt or liability of an individual as it has no issuer. These are not money and are definitely not currency.
RBI has been against private cryptocurrencies since inception. It believes that these are dangerous for the security and financial stability of the country.
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