India’s Finance Minister had announced a 30% tax on all crypto income, including NFTs
Tax chief JB Mohapatra says the step doesn’t equate to legalizing crypto trading in the country.
Tuesday’s budget speech by India’s Finance Minister Nirmala Sitharaman included a provision for a 30% tax on crypto income, prompting reactions from across the crypto community that the country had signaled recognition for crypto assets.
But in a statement made after the budget speech, Central Board of Direct Taxes (CBDT) chairman JB Mohapatra looked to clarify that this view could be wrong.
According to the CBDT boss, the finance ministry’s move to tax cryptocurrencies should not be taken to mean that trading in these digital assets is officially legal.
He said that taxing crypto trades under the new laws has no connection whatsoever with their legality.
Crypto “do not ipso facto become legal or regular just because you have paid taxes on that,” Mohapatra noted in the interview.
He added that while the move to introduce the taxes widens the tax bracket and gives the taxman an extra net to target potential cheats and other illegal activities.
Despite this obvious benefit, he explained, only a proper regulatory framework on cryptocurrencies could spell the legality or otherwise of trading of the asset class.
India will launch its central bank digital currency in the next one or two years, even as it looks to bring private cryptocurrencies under government regulation.