Indian tax department chief says Crypto tax doesn't legalize trading

The Indian tax department head said that crypto taxation will help the department evaluate the exact depth of the digital asset market.

Indian tax department chief says Crypto tax doesn't legalize trading

The Indian tax department head said that crypto taxation will help the department evaluate the exact depth of the digital asset market. 

The head of the Central Board of Direct Taxes (CBDT) in India said the 30% tax on crypto holdings doesn't necessarily make the crypto trade legal in India. 

The finance minister of India Nirmala Sitharaman declared a 30% tax on crypto holdings during the budget session on Tuesday, triggering several headlines on the lines of "India legalizes crypto" CBDT chief J.B Mohapatra target to debunk these misconceptions. 

Mohapatra said that the new crypto tax would help the income tax department measure the depth of the digital currency market in the country. also expressed that imposing a tax on the nascent crypto market doesn't necessarily legalize its trade in the country.

“The crypto exchange or the digital assets transactions do not ipso facto become legal or regular just because you have paid taxes on that.”

The tax department chief stated that the legality of the crypto trade could be determined only after a clear national framework is introduced in the parliament. he explained the tax imposition claiming it would help the department to follow illegal activities associated with digital assets. also advocated for regulating the crypto market to follow the flow of money moving in and out of the digital asset ecosystem. 

The Indian government has been working on crypto regulatory frameworks since 2019 but has been only recently introduced a crypto bill. few crypto exchange operators called the 30% tax progress, The government has come a long way from its early days when it was looking to impose a blanket ban and jail terms for crypto-related violations. 

Thailand's government recently announced its 15% tax proposal on crypto transactions after facing backlash from retail market operators. South Korea also declared a 20% tax proposal due to a lack of clarity on crypto regulations.

Read: Indian government imposes 30% crypto tax and introducing digital rupee CBDC by 2022-23