Is the proposed 30% tax on Cryptocurrencies a tacit acceptance of cryptocurrencies by the Government Of India? Indian Finance Minister Nirmala Sitaraman quashes such possibilities and said that taxing crypto assets does not mean the legalization of cryptocurrencies.
The Finance Minister’s statement comes at a time when the cryptocurrency tax proposal has evoked mixed responses. While some have decried the tax as another move to regulate DeFi, others have taken it as a signal of acceptance of cryptocurrency by the Government.
Sitharaman: I am not going to legalize it or ban it at this stage
The Indian FM has broken her silence on cryptocurrency legalization and said that the Government has only taxed the profits emanating from the crypto trade. It must not be read as a sign of acceptance of cryptocurrency as a currency of value at par with fiat currencies issued by the central banks.
The Economic Times quotes Sitharaman saying, “I am not going to legalize it or ban it at this stage. Banning or not banning will come subsequently when consultations give me input”.
Many experts opine that the move to bring profits earned from cryptocurrency transactions is the first step towards legalizing it.
The cryptocurrency tax comes at a time when the Government is in the process of bringing the Cryptocurrency and Regulation of Official Digital Currency Bill. Unfortunately, the bill wasn’t mentioned among the list that will be taken up during the Budget session.
RBI opposing the Bill
Legalizing cryptocurrency is facing stiff resistance from the Reserve Bank of India, which has fiercely opposed any such move and said it would be detrimental to the nation’s financial stability.
The RBI has not budged and maintained that private cryptocurrencies are a threat to financial stability.
Speaking after the monetary policy review, RBI Governor Shaktikanta Das said, “Cryptocurrencies have no underlying (value), not even a tulip.”
Sitaraman has proposed a 30 percent tax on the sale of private crypto assets without any deduction or exemption.
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