What Are Crypto Currencies And What Is The Most Recent Tax On Crypto?

Safalta Expert Published by: Deepesh Mehra Updated Wed, 02 Feb 2022 08:40 AM IST


Get to know What Are Crypto Currencies And What Is The Most Recent Tax On Crypto?

Crypto Currencies have been in the headlines for quite some time.  The crypto assets now and then attract the attention of the world and with the advent of technology and dissemination of information related to them, the craze for Crypto does not seem to end. They have been endorsed by the CEO of Tesla and legal tenders in countries like Ecuador. Even organizations like the UN are not untouched by the crypto - UNESCO was the first UN organization to start a funding program in Crypto. Are you aware of what are Cryptocurrencies and why are they in news again? 

What Are Crypto Currencies?

Crypto Currencies are virtual assets or virtual currency that are being traded and exchanged for monetary transactions. They are often based on BlockChain Technology, which works like a distributed ledger.

Source: https://www.news18.com/

Though the origin and inventor of cryptocurrency are not known. They have been around for quite some time.  They are traded and exchanged like digital assets that do not have any physical presence. The experts call them speculative assets. 
  • The advantages of cryptocurrencies include cheaper and faster money transfers and decentralized systems that do not collapse at a single point of failure.
  • The disadvantages of cryptocurrencies include their price volatility, high energy consumption for mining activities, and use in criminal activities.
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List Of Crypto Currencies

Following is the list of crypto that is relevant from an exam point of view.

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The Indian Government has not recognized any of the crypto assets, but by the judgment of the Honorable Supreme Court people can trade in Crypto assets. In order to under stand what are cryptocurrencies,  candidates must have a look at the list of the crypto assets:
  1. Ethereum (ETH) ...
  2. Litecoin (LTC) ...
  3. Cardano (ADA) ...
  4. Polkadot (DOT) ...
  5. Bitcoin Cash (BCH) ...
  6. Stellar (XLM) ...
  7. Dogecoin (DOGE) ...
  8. Binance Coin (BNB)
Candidates must be aware of Bondi - A crypto-asset released by Australia with the help of the World Bank. There is also lIbra, the digital currency by Facebook.

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What Is The Stand Of India On Crypto?

Indian Government and Reserve Bank Of India have always advised against investing in Crypto Assets. The RBI had imposed a ban on crypto which was lifted after the intervention of the Supreme Court. The Indian Government is in process of making Cryptocurrency and Regulation of Official Digital Currency Bill, 2021. That will most likely regulate or ban the crypto assets in India. 

What Is Tax On Crypto?

In the most recent budget tabled yesterday, the Government of India has decided to tax the income generated from Crypto transactions The Finance Minster has proposed a tax of 30% that will be levied on transactions above a certain limit. The Experts have welcomed this step as this might be the first step towards regulating Crypto Currencies. 

The government has also hinted at the rollout of Government-Owned Digital Currency, or RBI'S Digital Currency by 2023. The government-based digital currency in addition to the real currency has been proposed by the RBI last year. The Digital Currency has already been launched in countries like - China.

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