Cryptocurrency Law In India To Come After Global Consensus, Says Report

Prime Minister Narendra Modi in his address to the World Economic Forum in January said that a global uniform approach on cryptocurrencies is needed and steps by a single nation will not be sufficient

Gains from cryptocurrencies will be taxed starting April 1. Image: Getty

New Delhi: The central government will bring legislation for cryptocurrencies only after a global consensus emerges on regulating such assets, a source familiar with the matter told news agency Bloomberg.

According to the report, the Centre isn’t planning a law soon to either regulate or tighten provisions. The news agency also tried to reach a finance ministry spokesman, however, he didn’t respond.

Prime Minister Narendra Modi in his address to the World Economic Forum in January said that a global uniform approach on cryptocurrencies is needed and measures by a single nation will not be sufficient.

The government has announced a 30 per cent tax on income from digital assets from April 1, making it costlier to trade and bringing such transactions at par with activities like horse racing and lotteries.

Gains from cryptocurrencies will be taxed starting today (April 1).

Finance Minister Nirmala Sitharaman in her Union Budget speech on February 1 proposed 30 per cent tax on proceeds of digital assets. A 1 per cent tax deducted at source (TDS) on virtual currency contributions exceeding Rs 10,000 per year was also recommended.

According to analysts, this will lead to a huge tax collection as the turnover of the top 10 crypto exchanges in India is around Rs 1 lakh crore.

The 30 per cent tax bracket is the highest tax bracket and the rate is the same as earnings from a lottery.

The government had earlier planned to come up with a legislation to make its stand clear on the matter.

The Reserve Bank of India (RBI) has openly voiced its opposition to private digital currencies, equating them with Ponzi schemes and said they were a threat to financial sovereignty.

Crypto investments have flourished in India after the country’s top court set aside restrictions imposed by the RBI in March 2020.

Chainalysis, a crypto-analysis firm, in its October report said that the Indian digital currency market grew 641 per cent from July 2020 through June 2021.