Cryptocurrencies not legal right now, can’t predict future of this segment, says Union minister

Amid growing interest in the cryptocurrency industry, the Union Minister Bhagwat Karad on Saturday said cryptocurrencies are not legal in the country and nothing could be said at present about what could happen in this segment in the future. 

In view of 30% tax imposed on income from digital asset transfers, the Union minister said, “there is information that some people have invested in cryptocurrencies. Thus, 30% tax has been proposed in the Union Budget on cryptocurrency gains."

The Reserve Bank of India and the Union government have not given any sort of recognition to cryptocurrencies and, therefore, they are not legal in the country right now, the Union minister of state for finance said. One can't say if it would be legitimized or not in the future, said the minister. 

Asked whether fuel prices would rise after the elections in Uttar Pradesh, he said the Centre had cut prices on petrol and diesel by ₹5 and ₹10 respectively. While BJP-ruled states followed suit and cut taxes from their side, many states did not, he added. The price of petrol in Maharashtra, which is ruled by the Maha Vikas Aghadi, is higher than retail rates in MP, which is a BJP-ruled state, Karad said. 

Union Finance Minister Nirmala Sitharaman had announced that income from digital asset transfers will be taxed at a rate of 30%. This move is seen as 'crypto tax'.

Presenting the Union Budget 2022-23 in the Lok Sabha, Sitharaman said gifts received in the form of cryptocurrencies will also be taxed at the same rate. Cryptocurrencies gifts will be taxed at the receiver's end.

"I propose to provide that any income from transfer of any virtual digital asset shall be taxed at the rate of 30%. No deduction in respect of any expenditure or allowance shall be allowed while computing such income, except the cost of acquisition," Sitharaman had said.