Taxing Cryptos Doesn't Mean It Is Being Legalised, Says FM And People Are Confused

Union Finance Minister Nirmala Sitharaman has clarified that the decision on "banning or not banning" cryptocurrencies will be taken after consultations. She also said that the government's move to levy a 30 per cent tax on gains from cryptocurrencies has nothing to do with the legality of private digital currencies in the market.

Replying to the general discussion on Union Budget, the minister said, "I am not going to legalise it or ban it at this stage. Banning or not banning will come subsequently, when consultations give me input".

shutterstock

About the profit emanating from transactions in cryptocurrencies, she stated that "(Whether it is) legitimate or illegitimate, it is a different question, but I will tax because it is a sovereign right to tax".

The minister was responding to the questions raised by Congress member Chhaya Verma on cryptocurrency.

Taxing cryptocurrency

Verma had asked about the legitimacy of taxing cryptocurrency.

The minister's clarification came at a time when many had started speculating that the government may legalise cryptocurrencies in India as transactions have been made taxable.

shutterstock

In the Union Budget for 2022-23 presented in Parliament on February 1, the government proposed levying a 30 per cent tax on gains made on cryptocurrency trades by investors and the announcement was welcomed by cryptocurrency industry players, saying it legitimises their trades.

The minister's statement in the Parliament has left many confused.

This new tax can be called Illegal Gains Tax. Wondering if the scope to tax will be expanded to drugs, gambling etc soon?
?? https://t.co/ST2bnzydEn

¡ª Priyanka Chaturvedi?? (@priyankac19) February 12, 2022

Taxing cryptos doesn't mean it has been legalised - Nimo.

Marrying someone doesn't mean you have to stay with them - Namo.

¡ª Narundar (@NarundarM) February 12, 2022

I love you but as a friend #Cryptos #Cryptoindia pic.twitter.com/aUVsF4FPJY

¡ª Harshil (@Harshilnparmar) February 11, 2022

Taxing cryptos does not mean it has been legalized, said Sitharaman.
To explain it, here is our 50Word Edit pic.twitter.com/xiRMBvX4MT

¡ª Sir ????? (@SirKazamJeevi) February 11, 2022

Taxing cryptos does not mean it has been legalized, says Sitharaman

India's first illegal tax ? .. Power of Ji Government

¡ª Iyan Karthikeyan (@Iyankarthikeyan) February 12, 2022

Earlier, on Thursday, Reserve Bank Governor Shaktikanta Das said cryptocurrencies are a "threat to macroeconomic and financial stability" and cautioned investors against punting on them.

Das invoked the 17th century 'tulip mania', widely considered to be the first financial bubble, to caution investors, saying the cryptocurrencies do not even possess the value of the exotic flower.

The latest comments from the Reserve Bank of India (RBI) Governor are also a reiteration of institutional concerns on crypto assets.

shutterstock

"Private cryptocurrencies or whatever name you call it are a threat to our macroeconomic stability and financial stability. They will undermine RBI's ability to deal with issues of financial stability and macroeconomic stability," Das told reporters.

RBI has been repeatedly flagging its concerns on such instruments and had banned the banking system from aiding such trades, which was struck down by the Supreme Court in 2020.

The PM Modi-led government had proposed to introduce the Cryptocurrency and Regulation of Official Digital Currency Bill seeks to ban all but a few private cryptocurrencies to promote underlying technologies while allowing an official digital currency by RBI during the Winter Session of the Parliament.

For more on news and current affairs from around the world, please visit Indiatimes News.