FameEX Hot Topics | Modi Reappoints Nirmala Sitharaman as India's Finance Minister Amid Investor Concerns Over High Crypto Taxes

Indian Prime Minister Narendra Modi has reappointed Nirmala Sitharaman as Finance Minister, extending her tenure that began in 2019. Sitharaman, who delivered her sixth budget earlier this year, continues to play a pivotal role in shaping India’s economic policies, including those concerning cryptocurrency regulation and taxation.

A significant concern among Indian crypto investors is the high taxation rate. Since new rules were implemented in 2022, India has imposed a 30% flat tax on income from the sale or transfer of cryptocurrencies, covering trades and purchases. Additionally, income from earned cryptocurrencies, such as staking or airdrops, is taxed based on its fair market value at the time of receipt. Furthermore, there is a 1% Tax Deducted at Source (TDS) on transactions exceeding ₹50,000 ($600). This TDS applies to all crypto transactions and is deducted at the time of the transaction.

Despite these stringent tax measures, the Indian government has yet to establish a comprehensive regulatory framework for cryptocurrencies. However, it acknowledges the potential risks associated with digital assets, including their use in illegal activities like money laundering and terrorism financing.

Sitharaman has consistently emphasized the necessity of international cooperation in regulating crypto assets due to their cross-border nature and technological complexities. She maintains a cautious stance on cryptocurrencies, asserting that they cannot be considered legal tender in India. The Reserve Bank of India (RBI), the country’s central bank, has also expressed concerns about the financial stability risks posed by cryptocurrencies.

As Sitharaman continues in her role, investors remain wary of the high crypto taxes and the lack of a clear regulatory framework, which add to the uncertainty in the rapidly evolving digital asset landscape.

Disclaimer: The information provided in this section is for informational purposes only, doesn't represent any investment advice or FameEX's official view.