India vs Rest: How do different nations treat cryptocurrencies?

From an initial tentative response, the government of India has come a long in dealing with cryptocurrency. The Indian government introduced a tax on all virtual digital assets (VDA) from April 1.

Cryptocurrency in India: From an initial tentative response, the government of India has come a long in dealing with cryptocurrency. The Indian government introduced a tax on all Virtual Digital Assets (VDA) from April 1.

All income earned from the online trade and transfer of cryptocurrencies are taxed at 30 per cent with no deductions or exemptions. This is also applicable is cases of gifting of cryptocurrencies.

As more and more investors looking for a quick buck start trading in cryptocurrencies, countries around the world are trying to regulate transactions in digital assets.

Cryptocurrency tax in India

The finance ministry has imposed a tax of 30% on income from dealings in cryptocurrencies including NFTs.

While paying tax, profit from one brand of cryptocurrency cannot be offset by loss in another. A flat 30% will be charged on  the profit.

From July 1, a 1 per cent withholding tax on the entire transaction value for VDAs will also be charged. TDS of 1% is already being charged.

Cryptocurrency policy in other countries

- US: VDAs have been granted the same status as regular stocks. Income tax on profit from trading in VDAs can be offset by losses. 

- UK: VDAs are given equal treatment to regular shares in the UK as well. Capital gains tax are to be paid on the profit in case of disposal of a VDA for personal investment purposes. Losses from the transfer of VDAs are allowed to be deducted from overall capital profit.

- Canada: VDAs are treated as a similar commodity to regular stocks in Canada as well. Income tax is charged on the entire profit of a VDA transaction. 

- El Salvador: This Central Amerian country became the first nation to adopt Bitcoin as a legal tender. The country even announced a Bitcoin city where all transactions will be conducted through Bitcoin. Here, Bitcoin transactions will be free from any property or capital gains taxes.