The government has made it clear that it has no plans to regulate Metaverse or Web 3.0, as these technologies are still under development.
Although, as of April 1, 2022, the government has levied a hefty 30 percent tax on cryptocurrencies trading income and a 1 percent TDS levy on any such transaction.
Treasury sources have said they are aware of the emerging new technologies and the rapid spread of technologies such as artificial intelligence, blockchain, drone, augmented reality, metaverse and web 3.0.
They added that the government has already formulated national strategies for artificial intelligence and blockchain.
Also, the Information Technology Act 2000 covers the technology area in the country, hence the government has no intention of regulating such developing sectors.
The new tax clarification on the losses of digital assets in another cannot offset the gains from the transactions of one asset has had serious repercussions.
The government’s clarification about not allowing losses on a particular digital asset to be offset against income from another version of a crypto holding company is “harmful to the Indian crypto industry and the millions that have invested in it.” emerging asset class,” Ashish Singhal, Co-founder and CEO of CoinSwitch, one of India’s top crypto exchanges, had said.
The government does not allow tax breaks on infrastructure costs incurred. At the same time, mining crypto assets will not be treated as acquisition costs, Finance Minister Pankaj Chaudhary told lawmakers in parliament on Monday.
The minister’s clarification is a further setback for an industry that was slammed with a hefty 30 percent tax rate on profits from transactions of digital assets in the budget unveiled last month.
And the lack of regulation is a good thing for metaverse technology, components of which have already been developed within online video games.
What is Metaverse?
Metaverse is a network of 3D virtual worlds focused on social connection. In futurism and science fiction, it is often described as a hypothetical iteration of the Internet as a single, universal virtual world facilitated by virtual and augmented reality headsets.
What is Web 3.0?
Web 3.0 is an idea for a new iteration of the World Wide Web (www) based on blockchain technology, incorporating concepts such as decentralization and token-based economy.
The term was coined in 2014 by Ethereum co-founder Gavin Wood, and the idea gained interest in 2021 from cryptocurrency enthusiasts, major tech companies, and venture capital firms.