Last Updated on Feb 9, 2022 by Ayushi Mishra
Finance Minister Nirmala Sitharaman has stated that the government will soon provide clarification on the formalisation of cryptocurrency.
During a post-budget engagement hosted by industry body PHD (progress, harmony and development) Chamber of Commerce and Industry, Sitharaman responded to a query about cryptocurrency regulation by saying that the Centre has a consultation procedure in place.
“We will come up with clarity soon,” the finance minister continued.
The government has previously declared that virtual digital assets will be taxed in the budget for 2022-2023.
According to revenue secretary Tarun Bajaj, income tax return forms would have a distinct column for disclosing cryptocurrency earnings and paying taxes beginning next year.
From 1 April 2022, the government will levy a 30% tax, plus cess and surcharges, on such transactions, in the same way as it does on profits from horse races or other speculative transactions.
Mr Bajaj previously stated that earnings from cryptocurrencies have always been taxed, and in the proposed budget it is not a new tax, but rather provides clarity on the matter.
“The provision in the Finance Bill is related to taxation of virtual digital assets. It is to bring certainty in taxation of cryptocurrencies. It does not convey anything on its legality which would come out once the Bill (on regulating such assets) is introduced in Parliament,” Mr Bajaj added.
Meanwhile, the government has stated that private cryptocurrencies would never be accepted as legal tender. Private cryptocurrencies have been vehemently opposed by the RBI because they may have ramifications for national security and financial stability.