The head of the Central Board of Direct Taxation (CBDT) in India said that the recent announcement of a 30% tax on cryptocurrencies does not necessarily make cryptocurrency trading legal in India.

India’s finance minister announced a 30% tax on cryptocurrencies during the budget session on Feb. 1, prompting several headlines such as “India legalizes cryptocurrencies.” However, CBDT chief JB Mohapatra attempted to debunk these misconceptions.

Mohaptra, in a post-budget press briefing, said that the new crypto tax would help the income tax department gauge the depth of the digital currency market in the country. He also emphasized that imposing a tax on the nascent crypto market does not necessarily legalize its trade in the country. He explained:

“Cryptocurrency trading or digital asset transactions do not become legal or regular ipso facto just because you have paid taxes on it.”

The head of the tax department added that the legality of cryptocurrency trading could be determined only after a clear national framework is presented in parliament. However, he justified the levy on the grounds that it would help the department track illicit activities associated with digital assets. He also advocated regulating the crypto market to track the flow of money in and out of the digital asset ecosystem.

Related: India To Introduce 30% Crypto Tax, Digital Rupees CBDC By 2022–23

The Indian government has been working on crypto regulatory frameworks since 2019, but a crypto bill was recently introduced. Some cryptocurrency exchange operators called the tax advance 30%, stating that the government has come a long way since its inception, when it sought to impose a blanket ban and jail terms for crypto-related offences.

Thailand recently rescinded its proposed 15% tax on crypto transactions after facing backlash from retail market operators. South Korea has also delayed its 20% tax proposal due to a lack of clarity in crypto regulations.





This post Crypto Tax Does Not Legalize Trading, Says Indian Revenue Department Head

was published first on https://cointelegraph.com/news/crypto-tax-doesn-t-legalize-trading-says-indian-tax-department-chief

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