From April 1, 2022, the Ministry of Finance of India (MF) is going to impose a tax of 30% on any transactions with cryptocurrency and non-fungible tokens. Moreover, the introduction of a tax will not automatically mean the legalization of digital assets in the country.
The new tax was announced in a speech to MPs by Finance Minister Nirmala Sitharaman. The Indian media and bloggers were quick to interpret the event as the official recognition of the cryptocurrency as a legal asset.
However, the head of the Central Board of Direct Taxes (CBDT), Jagannath Bidyadhar Mohapatra, was quick to declare: the tax is necessary so that the government can understand how developed the crypto industry is in the country. Moreover, the imposition of the tax “will help the government track down illegal activities.”
“Trading or operations with digital assets will not become legal if you pay tax on this,” the head of the fiscal department said.
The legality of cryptocurrency trading can only be determined after the relevant document is adopted by Parliament, Mohapatra added.
The Indian government has been working on a regulatory framework for the use of cryptocurrencies since 2019, but the relevant bill was only recently introduced in Parliament. In 2021, Bloomberg, citing its sources, reported that the Indian authorities plan to completely ban cryptocurrencies.
Source: Bits
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