Despite the sudden rise in Bitcoin prices following the US presidential elections earlier this month, the Union Finance Ministry said the Center will comply with global cryptocurrency regulations regardless of the rise or fall. current hype. A source in the finance ministry informed Business Today that India would prioritize policies that benefit its economy, without being influenced by other countries.

The official also mentioned that the Ministry of Economic Affairs is finalizing a document on cryptocurrency, which will be published soon.

On Wednesday, Bitcoin hit its new all-time high, closing at $94,078. This increase can be attributed to the significant advancements in the crypto and financial sectors. Reports suggest Donald Trump’s media company is considering the acquisition of crypto trading firm Bakkt, while BlackRock’s iShares Bitcoin Trust has introduced options trading. The rise above $94,000 highlights Bitcoin’s growing importance as an institutional asset.

This rise was driven by factors including the potential for a pro-crypto stance under the Trump administration and speculation that Microsoft would incorporate Bitcoin into its treasury, as proposed by MicroStrategy’s Michael Saylor.

Market responses to these developments impacted altcoins, causing a brief rally followed by a correction. Despite these fluctuations, analysts remain positive and anticipate continued growth fueled by institutional investors.

The cryptocurrency market has seen a surge of positivity following the presidency of Donald Trump, as his administration is expected to support cryptocurrencies. This optimism stems from the belief that a more favorable stance on cryptocurrencies could lead to the removal of regulatory barriers that have hampered market growth.

In India, on the other hand, the landscape presents a different set of challenges. Despite a gradual increase in the number of cryptocurrency enthusiasts and investors in recent years, a lack of regulatory clarity persists in the country.

Cryptocurrency taxation

Budget 2022-23 introduced a flat tax rate of 30% on gains from virtual digital assets (VDA) or crypto assets, regardless of the individual’s income tax rate. Additionally, a 1% tax withheld at source (TDS) has been applied on all transfers involving such assets.

In order to clearly define and classify virtual digital assets, a new section 2 (47A) has been incorporated into the Income Tax Act.

Effective April 1, 2022, Section 115BBH of the 2022 Budget imposes a 30% tax (plus a 4% tax) on profits from trading cryptocurrencies or other virtual digital assets.

Effective July 1, 2022, Section 194S now imposes a 1% withholding tax on crypto and other VDA transfers exceeding INR 10,000 (or INR 50,000 in certain cases) in the same financial year.

Taxation on cryptocurrency transactions applies to various individuals, such as private investors, commercial traders, and anyone participating in the exchange of digital assets in a given financial year.

The tax rate is uniform for all income levels and does not distinguish between short- and long-term profits.

If the transaction takes place on an Indian exchange, the exchange will withhold Tax Deducted at Source (TDS) and send the remaining funds to the seller. In this case, the buyer is not required to take any additional steps.