GANGTOK: The Union Budget presented by Finance Minister Nirmala Sitharaman announced India developing its own digital currency with clearance from Reserve Bank of India. The Budget also mentions a 30 per cent tax on crypto currency.
So what could be the future of crypto currency in a state like Sikkim, where individuals are exempted from paying income tax?
Sikkim politician Pasang Sherpa has a suggestion.
“We have State Bank of Sikkim, just like the Reserve Bank of India, that could oversee crypto currency transactions. Sikkim is already vibrant in terms of crypto currency craze among the younger population. It will be of great benefit to Sikkim, as we can grow as crypto currency or block chain hub in the country. It definitely will be futuristic,” he said.
Sherpa went on to add how negotiations are required with the state government “to find a way out with the Central government”.
“There can be a situation where the State Bank of Sikkim could welcome transactions in crypto currency, which will greatly benefit various other endeavours taken in the form of crypto currency. If we start the same, we could be pioneers of crypto currency, not just in the country but even in trade with neighbouring countries.”
Crypto currency investor and entrepreneur Rewaj Chettri from Sikkim, told EastMojo, “I think it’s good news for crypto market because now it has come under regulation, which the people were earlier fearful about. It’s a positive news. Technically, we should be exempted from income tax but we can be taxed because it’s a digital asset, which is transacted outside Sikkim. But also the other part is that we deal in such negligible quantity, so we might not come under the preview of income tax.”
“But if taxation happens at the exchange level like GST, we will be taxed. Or we might be taxed on selling and buying like gold. So we will probably be taxed because that has nothing to do with filing of annual taxes. Much clarity on this will happen over a period of time,” Chettri said.
On crypto currency tax exemption in Sikkim, MP Indra Hang Subba said, “It is too early at this point in time to comment on this particular issue.”
“This will have pan-India effect, including Sikkim. The fate of crypto currency in circulation or possession at present seems unclear as the government has given sole authority to the RBI. However, the government decision to tax digital assets at 30% seems a way towards legitimisation of the possession. It will be too early to comment until concrete framework is unveiled,” the MP said.
Non fungible token (NFT) creator Rakshita Philip from Sikkim said, “Creating an NFT is already expensive; it is a huge roadblock for most artists to venture into NFT. Someone collecting or trading in crypto currency is different. As an artist when my income undergoes 30 per cent tax and one per cent TDS, there is eventually no income. Exempting people from Sikkim against this tax will be a big relief. Otherwise artists in this country are already planning to relocate to other countries that are friendlier in digital currency.”
“I have so many assets already and now I have to pay taxes. The government didn’t think this through; it appears more like a blanket initiative, as so many things remain unclear. When there is no tax in the US, why would people in Sikkim or any part of country pay?” she said.
On the Union Budget, Sherpa thanked the Centre for increasing the capital expenditure to Rs. 1 lakh crore for states. He also lauded the positive development of transitioning from an oil-based economy to clean energy-based economy.
“Sikkim is a major contributor through its hydro power projects and a few solar projects in the clean energy economy. We oppose hydro power projects and there is no denying that Sikkim is already a major contributor in hydro energy in the country. But now we can look upon solar energy to even provision for e-vehicles or battery powered vehicle infrastructure development in Sikkim,” the politician said.
Speaking about infrastructure development under PM DevINE being given a big thrust and the two ropeway projects in Bhaledunga, South Sikkim, and Sanga Choeling project in Pelling, West Sikkim, he said, “The two projects of Rs. 50 and Rs. 60 crore each under the Rs 1,500 crore PM DevINE initiative will help Sikkim in a big way.”
Sikkim Chief Minister Prem Singh Tamang had also expressed gratitude to Union Finance Minister Nirmala Sitharaman for allocating Rs 1,500 crore under Prime Minister’s Development Initiative for North-East (PM-DevINE).
The CM said, “The two projects allotted to Sikkim under this initiative are a significant step towards expanding infrastructural development in Sikkim and will be highly beneficial for the state and the people.”
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