Cryptocurrency taxes do not authorise trade, according to the head of India’s tax agency
The head of India’s tax department said that crypto taxes would assist the administration in determining the precise size of the digital asset market.
The chairman of India’s Central Board of Direct Taxes (CBDT) said that the recent imposition of a 30% tax on crypto holdings does not necessarily legalise cryptocurrency trading in the country.
On Feb. 1, India’s finance minister declared a 30% tax on crypto holdings during the budget session, prompting multiple headlines along the lines of “India legalises crypto.” CBDT head JB Mohapatra, on the other hand, sought to dispel these myths.
Mohaptra said at a post-budget news conference that the new crypto tax will assist the income tax department in determining the size of the country’s digital currency sector. He also emphasised that taxing the embryonic cryptocurrency market does not automatically authorise its commerce in the nation. He elaborated:
“Cryptocurrency trading or digital asset transactions do not become lawful or regular ipso facto just because you have paid taxes on them.”
The tax department director stated that the legality of cryptocurrency trading could only be assessed if a comprehensive national framework is enacted by the legislature. He defended the levy, however, by arguing that it would aid the agency in tracking unlawful activity involving digital assets. He also argued for regulating the crypto market in order to monitor the inflow and outflow of money inside the digital asset ecosystem.
Since 2019, the Indian government has been developing regulatory frameworks for cryptocurrency but has just recently proposed a crypto law. Some cryptocurrency exchange operators hailed the 30% tax as progress, noting that the government has gone a long way from its early days of considering a total ban and harsh penalties for crypto-related crimes.
Thailand recently rescinded a 15% tax on cryptocurrency transactions in response to protests from retail market operators. South Korea has postponed its proposed 20% tax on cryptocurrency owing to a lack of clarity around cryptocurrency rules.