New Delhi: Union Finance Secretary TV Somanathan on Wednesday said leading cryptocurrencies such as Bitcoin and Ethereum as well as non-fungible tokens (NFT) will never become legal tender.
“Bitcoin, Ethereum or NFT will never become legal tender. Crypto assets are assets whose value will be determined between two people,” Somanathan told a press conference, ANI reported.
“You can buy gold, diamond, crypto, but that will have not have the value authorization by the government,” he added.
The Finance Secretary said the people investing in private crypto should understand that it does not have the government’s authorisation.
“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 discouraging investment in crypto assets.
Somanathan said the digital currency will be backed by the Reserve Bank of India (RBI) which will never be default.
“Money will be of the RBI but the nature will be digital. Digital rupee issued by the RBI will be a legal tender,” said Somanathan.
“Rest all aren't legal tender, will not, will never become legal tender,” he added.
The Finance Secretary said the government policy is except agriculture all other income is taxable.
“Currently, we don't have clarity on cryptocurrency, if it's business income, capital gain or speculative income. Some people declare their crypto assets, some don't. Now uniform rate will be 30% tax,” he added.
Asserting crypto is a speculative transaction, Somanathan said: “So, we are taxing it at a 30% rate. No one knows the real value of Ethereum. Their rate daily fluctuates.”
“One who earns income through crypto will have to now pay 30%. This is the new policy of the government,” he added.