30% tax on crypto income is a welcome move but still huge
We are having budget announcements from the government in the last two days. The new financial year is coming up with lots of new financial allocations and changes. People who are invested in crypto were expecting an announcement in this budget and it finally came. It came out as a surprise. Though I was already expecting a good decision by the government on the crypto bill, this isn't a bad announcement I would say.
I personally welcome this announcement. The main reason is that we are not having a full ban on Crypto. That's definitely good news. But having a flat 30% tax on the crypto income is definitely not very welcoming. I was expecting some regulations but 30 percent tax is something not affordable for everyone. People who are in the 30 percent tax slab already will not have a big impact but for people who are not in the tax slab at all, a 30% flat tax would be a big hit on them.
RBI coming up with new cryptocurrency
The finance minister also announced that the government is working on a new cryptocurrency called Central Bank Digital Currency (CBDC). Mostly it would be out in another year's time. It will be good to have that. But there is still no clarity on how the blockchain would be created and what will be the use case, supply, and everything. Another biggest question would be to know if it will be pegged to other popular cryptocurrencies like BTC or USDT.
Government usually calls other cryptocurrencies private cryptocurrencies. But I'm wondering if they already got some clarity on the other cryptocurrencies or not. But good that they did not comment anything on other popular cryptocurrencies during the budget announcement. Something makes me think that the government will still need more clarity on many things and hopefully they will start gaining that knowledge in the coming years. In another 5 years down the line, I'm expecting many countries to launch a digital version of their currency and let people trade or transact on them. That is the only way forward if I'm not wrong.
Would people start disclosing their digital assets to the government
I personally feel that even though there is a 30% flat tax on the crypto income, it can be hard to track or trace it 100%. There will still be lots of people who would not be willing to pay that 30% tax and would find shortcuts. Things similar to this are already happening in the share market. Not all people are disclosing their share market income and only in recent years have they made Aadhar mandatory to get some visibility. But still, people don't disclose all their assets to the government and pay the expected tax.
The thirst is more towards a taxless economy. Many people like decentralization because of the very fact. Even though I like decentralization, I still believe that centralization is important to maintain law and order. Otherwise, people who have the money will be able to rule the world and we might possibly get back to King's rule. Things can get scary if there is no control by somebody like a well-formed government.
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