Union Budget 2022: NFT community in Kerala elated

“We consider this move to tax virtual digital transactions as a big positive. Earlier, there were doubts whether such transactions were legal or not.

Published: 02nd February 2022 06:31 AM  |   Last Updated: 02nd February 2022 03:21 PM   |  A+A-

NFT

An illustration picture taken in London on December 30, 2021, shows gold plated souvenir cryptocurrency coins arranged by a screen displaying a NFT (Non-Fungible Token) logo. (Photo | AFP)

Express News Service

KOCHI: The budget proposal to impose a tax on the transfer of virtual digital assets is taken as a huge positive by the investors and traders in cryptocurrencies and digital creators in the NFT (non-fungible token) as it provides legal status to such assets.

“We consider this move to tax virtual digital transactions as a big positive. Earlier, there were doubts whether such transactions were legal or not. Now, there is more clarity,” said Anantha Krishnan Nadamel, a founder of NFT Malayali, a collective of Malayali artists in the crypto art space.

He said the proposed 30% tax is high, but expected it would kick in only for transactions above a certain limit, where the slab is between Rs 10-20 lakh. “Also, the tax rate will come into effect only when one liquidates the assets. As of now, it will not be applied for P2P (peer-to-peer) transactions. This is because it's not possible to track the deals as it happens between two people privately,” he said.

Actor Rima Kallingal, who recently auctioned her first NFT project ‘The Insurgent Bloom’ on a blockchain-based platform, for 2.75 ETH, or Ethereum, (about Rs 7.5 lakh to Rs 8 lakh), said the proposed taxation would solve the confusion over the legality of cryptocurrency. “When the Union government says it (virtual digital asset) is going to be taxable, I think a lot of confusion regarding the legality of cryptocurrency is solved now. However, 30% is a huge deterrent,” she said.

The actor, who is now involved with her next NFT project based on a dance theme, said the whole idea of cryptocurrency is based on its decentralised nature. “Though it is steep, the proposed tax will give legality to such assets,” she said. NFT is a one-of-its-kind crypto asset that is being increasingly used by artists since it is non-fungible and irreplaceable by another identical item.

Kochi-based Francis Kurien, who has built a global Skateboard Brand that’s launching its NFT-cum-physical delivery boards, starting from 0.4 ETH (nearly Rs 1 lakh), called the tax proposal a ‘positive development’. “There are a large number of youngsters between the ages of 16 and 19 years, who are entering the NFT space and making money through hard work. We hope that the tax rate of 30% will be applicable only for transactions above a certain amount,” he said.



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