“They are in a gray area. Buying and selling crypto is not illegal,” Finance Secretary TV Somanathan said in an interview to Bloomberg television.
“We have now put in place a taxation framework that treats crypto assets the same way we treat winnings from horse racing, or bets and other speculative transactions,” he said.
Union Budget 2022-23: Full Coverage
After several years over how to treat cryptocurrencies, the budget on Tuesday proposed taxing income from transfers of virtual assets at 30% – effectively removing any uncertainty about the legal status of such transactions. Gave.
A sharp tax rate on crypto could stifle growing trades in India, despite central bank warnings about the risks of money laundering, terrorist financing and price volatility.
The government is working on a law to regulate cryptocurrencies and the proposed law will need to be approved by the Union Cabinet before it can be taken to lawmakers.
“What will happen to the future regulation of crypto is an ongoing debate,” Somanathan said. “The approach of the government is to comprehensively consult and also see what is happening internationally,” he said.
He said that for now, the government will not jump the gun on regulation and will tax any income from such transactions.
While private virtual coins will not be legal tender, the Reserve Bank of India plans to launch its own digital currency in the year beginning April 1, which will usher in cheaper, more efficient currency management, according to the government.
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