Clarifying India's stand on private crypto, RBI digital money and crypto tax, a day after Union Budget 2022, Finance secretary TV Somanathan said that Bitcoin, Ethereum or NFT will never become legal tender.
The finance secretary said that the digital currency will be backed by the Reserve Bank of India which is the only legal digital tender in India. Money will be of the RBI but its nature will be digital and will be a legal tender, the finance secretary said. Rest (digital money) are all illegal tender and will never become legal tender, he clarified.
“Bitcoin, Ethereum or NFT will never become legal tender. Crypto assets are assets whose value will be determined between two people. You can buy gold, diamond, crypto, but that will not have the value authorized by the government,” Somanathan told ANI.
“People investing in private crypto should understand that it does not have the authorisation of the government. There is no guarantee whether your investment will be successful or not, one may suffer losses and the government is not responsible for this,” he added.
Then why was it brought under the 30% tax slab? The secretary said this is not only for crypto but for all speculative income as the government believes that all income except agriculture is taxable.
"Currently, we don't have clarity on cryptocurrency whether it is business income, capital gain or speculative income. Some people declare their crypto assets, some don't. Now the uniform rate will be 30% tax. This is not only for crypto. For example, if I take horse racing, that also attracts 30% tax. There is already a 30% tax on any speculative transaction. So we have decided to tax crypto at the same rate," he said.
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