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India’s finance minister announced a 30% tax on all crypto income, including NFTs
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Tax chief JB Mohapatra says the move does not amount to legalizing crypto trading in the country.
In Tuesday’s budget speech, India’s Finance Minister Nirmala Sitharaman introduced a provision imposing a 30% tax on cryptocurrency income, a decision that prompted members of the crypto community to interpret the move as an official sign of recognition for crypto assets.
However, in a statement issued after the budget address, Chairman of the Central Board of Direct Taxes (CBDT) JB Mohapatra sought to clarify that this interpretation may be misplaced.
According to the CBDT chief, the finance ministry’s decision to tax cryptocurrency transactions should not be taken as an indication that trading in these digital assets is formally legal.
He emphasized that taxing crypto under the new rules has no bearing on its legal status.
“Crypto does not become ipso facto legal or regulated merely because you have paid tax on it,” Mohapatra noted in the interview.
He added that while introducing taxation broadens the tax framework and gives authorities an additional tool to target potential evasion and other illicit activities, it does not substitute for a clear regulatory framework.
Only a comprehensive set of regulations can establish the legal standing and boundaries for trading in this asset class, he explained.
Separately, India is preparing to roll out a central bank digital currency within the next one to two years, even as private cryptocurrencies appear poised to remain subject to state regulation rather than formal legalization.