Clarity Soon On Cryptocurrency Formalisation, Says Finance Minister

Clarity Soon On Cryptocurrency Formalization, Says Finance Minister

Government has a consultation process for cryptocurrency formalization, Nirmala Sitharaman has said

Finance minister Nirmala Sitharaman has said that government will bring clarity on formalization of cryptocurrency soon.

Participating in a post budget interaction organized by industry body PHD Chamber of Commerce and Industry on Monday, while responding to a question on the regulation of cryptocurrency, Ms Sitharaman said that the Center has a consultation process for cryptocurrency formalization.

“We will come up with clarity soon,” the finance minister added.

Government has already announced in the budget for 2022-23 that virtual digital assets will be taxed.

Income tax return forms from next year will have a separate column for making disclosures on gains made from cryptocurrencies and paying taxes, revenue secretary Tarun Bajaj had said last week.

The government will from April 1, 2022 charge a 30 per cent tax plus cess and surcharges, on such transactions in the same manner as it treats winnings from horse races or other speculative transactions.

Mr Bajaj had said gains from cryptocurrencies were always taxable and what the budget proposed is not a new tax but providing certainty over the issue.

“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,” he said last week.

Meanwhile the government has already said that private cryptocurrencies will never be a legal tender. The RBI has been strongly opposing private cryptocurrencies as they could have implications on national security and financial stability.

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