The recent pronouncement of a 30% tax on crypto holdings by India’s Central Board of Direct Taxes (CBDT) does not necessarily make the crypto trade lawful in India, according to the head of the CBDT.
During India’s budget session on Feb. 1, the finance minister proposed a 30% tax on crypto holdings. Prompting various headlines along the lines of “India legalises crypto”. CBDT chief JB Mohapatra, on the other hand, sought to dispel these myths.
In a post-budget press conference, Mohaptra stated that the new crypto tax will assist the income tax department in determining the extent of the country’s digital currency sector. He further clarified that levying a tax on the embryonic cryptocurrency market does not imply that it is lawful to trade in the country. He elaborated:
“Just because you’ve paid taxes on a cryptocurrency trade or a digital asset transaction does not make it legal or regular.”
The legitimacy of the crypto trade, according to the tax department chairman, can only be assessed. If a clear national framework introduced in parliament. He defended the tax by arguing that it will aid the government in tracking illegal actions involving digital assets. He also argued that the crypto market should be regulated. In order to trace the flow of money into and out of the digital asset ecosystem.
Indian government has been working on crypto regulatory frameworks
Since 2019, the Indian government has been working on crypto regulatory frameworks. But a crypto bill only recently introduced. The government has come a long way from its early days. When it was trying to impose a blanket ban and jail terms for crypto-related offences, according to some crypto exchange operators.
After receiving opposition from retail market operators, Thailand recently cancelled its 15% tax proposal on cryptocurrency transactions. South Korea’s proposed 20% tax also postponed due to a lack of clarity on cryptocurrency legislation.