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India’s finance minister announced a 30 percent tax on all crypto income, including NFTs
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Tax chief JB Mohapatra says the move does not equate to legalizing crypto trading in the country
In her budget speech on Tuesday, India’s finance minister Nirmala Sitharaman included a provision for a 30 percent tax on crypto-related income, including NFTs, prompting the crypto community to question whether the country had effectively recognized crypto assets.
Following the budget announcement, the chair of the Central Board of Direct Taxes (CBDT), JB Mohapatra, issued a statement to clarify that this interpretation would be incorrect.
According to the CBDT chief, the finance ministry’s decision to impose taxes on cryptocurrencies should not be interpreted as formal legalization of trading in crypto assets.
He explained that taxing crypto transactions under new tax rules has no bearing on their legal status.
“Crypto does not become legal or regulated simply because you have paid tax on it,” Mohapatra remarked in an interview.
He added that bringing crypto into the tax net broadens the tax base and gives authorities additional tools to address potential fraud or other unlawful activities.
Despite these apparent benefits, he emphasized that only a comprehensive regulatory framework specifically for cryptocurrencies can clarify whether trading in the asset class is lawful.
India is planning to launch a central bank digital currency within the next one to two years, while also moving to bring private cryptocurrencies under government regulation.