India Crypto tax collection pulls in $19 million for 2022-23 year

India revealed it earned more than $19.2 million in taxes after new rules gave income from crypto transfers a flat 30% tax rate.

According to the Union Finance Ministry, the tax collected at source on payments made on transfer of virtual digital assets stood at $19.2 million for the financial year ending March 20, 2023.

India’s heavy crypto tax collections

During the Union Budget 2022-2023, Finance Minister Nirmala Sitharman proposed to impose 1% TDS on cryptocurrency transactions. This was in addition to 30% tax on the income from these transfers.

30% tax legislation came into effect in India on 1 April under Section 194S of the Income Tax Act, 1961, and the TDS levy was implemented in July 2022.

The government’s direct tax collection totaled Rs 157.9 crore (~$19.2 million) till March 20. When asked about the specifics of the government’s tax revenue from cryptocurrencies, the ministry revealed the numbers.

Web3 Plan ahead for India

At a recent event, India’s Information Technology Minister Rajeev Chandrasekhar declared that India does not want to stifle innovation. However, he prioritized safeguarding the security and intelligence objectives while ensuring ease of doing business and living.

As for crypto, the official said, “I don’t think we’re uncomfortable with anything.” Chandrasekhar added,

“I just want to be very clear on that, and our approach or our response to a sector is not based on comfort, discomfort, so much as harm, legality, illegality. That is the prism through which we look at areas that we need to focus on, legislate.”

That said, Chandrasekhar emphasized that the Indian government has a very clear position on all matters related to the internet, including web3 and blockchain. He claimed that the government is very encouraging of any innovation.

On the other hand, the minister said: “We have no problem with anything to do with blockchain. But it is certainly RBI’s case that crypto represents a macroeconomic risk.”

Crypto in India “Not Illegal if Regulated”

India’s central bank has often highlighted potential risks to financial stability that crypto could pose, while recommending an umbrella ban on the asset class.

Chandrasekhar had earlier claimed that there is no problem with cryptocurrency trading in India if all rules are followed. He made it clear that buying cryptocurrency through reputable means would not be against the law. Maintaining his position, he said this time that governments are cautious because of the ongoing market uncertainty.

The IT minister stated: “Just because it sounds like an innovative, fashionable thing to do, we shouldn’t rush to say that crypto is right and crypto is good.”