Union government has not legalised cryptocurrency despite imposing tax

New Delhi – In the Union Budget, a tax of 30% has been imposed on income via cryptocurrency. Discussions had begun about whether the government has legalised cryptocurrency by imposing this tax. But the chairman of the Central Board of Direct Taxes (CBDT), JB Mohapatra, emphasised that the government has not recognised the cryptocurrency. Furthermore, he said that imposing a tax on the income earned from transactions in cryptocurrency does not mean giving it legitimacy.

While presenting the 2022-23 budget on Tuesday, Union Finance Minister Nirmala Sitharaman announced a tax of around 30% on cryptocurrency income. Moreover, talks were rife that the central government levied the tax to legitimise cryptocurrency transactions. Some have raised the question of whether this makes cryptocurrency transactions legal. But while speaking about this, the chairman of CBDT JB Mohapatra clarified that the government had not given legitimacy to transactions in cryptocurrency. Besides, his department will be responsible for taxing income from cryptocurrencies. However, it would be wrong to assume that cryptocurrency is recognised with this imposition of the tax, said Mohapatra. At the same time, Mohapatra said that the tax imposition would make it easier to assess cryptocurrency transactions. He further expressed confidence that more information about this would be available soon.

Meanwhile, over the past few months, the Indian government has been making other countries aware of the potential dangers cryptocurrency poses. Prime Minister Narendra Modi had warned that this had created a strong possibility for the country’s youth to go astray. The warning was given by the Prime Minister of India while addressing a virtual event organised by the Australian think tank ‘Sydney Dialogue’.

Furthermore, it was also reported that India’s digital currency would be launched soon. The digital currency was announced by Finance Minister Nirmala Sitharaman while presenting the budget. It will be the country’s official currency, but its form will be digital. Finance Secretary TV Somanathan has said this currency would never sink.