Finance Minister Nirmala Sitharaman said her proposal to impose a 30 percent tax on crypto transactions should not be seen as a move to legitimize digital currency in India. The finance minister said the two are never related, which means the government reserves the right to ban crypto if it deems fit.
The above statement has come as a blow to crypto companies in the country that had heaved a sigh of relief after the tax proposal was announced even though they opposed the rather steep tax structure. Most had speculated imposing a tax on crypto transactions acts to provide sort of a legal cover on the digital coins.
The finance minister also said it is the sovereign right of the country to impose a tax on crypto transactions, justifying her move to impose a 30 percent tax on the digital currency. The finance minister was speaking in the upper house of the parliament when she made the above statement. She also said discussions are ongoing on ways and means to regulate the crypto market.
Apart from a flat 30 percent tax, the finance minister also proposed imposing a 1 percent tax deducted at source that would be applicable on digital assets when transferred over a specific threshold. The government though is yet to decide what the threshold is going to be like.
Industry representatives meanwhile have appealed to the finance minister and the Prime Minister and urged them to reconsider the steep tax imposed. Further, they also requested the government not to view the crypto industry as similar to gambling. The country happens to be among the top five in the world with the highest crypto and other similar virtual assets which runs into several billions of dollars already. Also, there are scores of individuals associated with the industry and any adverse legislation introduced could impact their livelihood as well along with the entire industry itself.
Also, while still on legislation, the government stated they are still debilitating on it and hopes to come up with something concrete soon enough. India had planned to introduce the crypto bill for the past two years. Crypto industry insiders are hoping the government would adopt a comprehensive and pragmatic approach to the emerging industry and come up with a solution that addresses the concerns of all sides.