When the Finance Minister was presenting the Budget for the next financial year, many were expecting either a proposal banning cryptocurrency or at least a suitable regulation for cryptocurrency trading. But the Finance Minister was content imposing a stiff 30 per cent tax on capital gains and a TDS of 10 per cent on every cryptocurrency transaction.
The Finance Minister clarified in Parliament that taxing cryptocurrencies does not give them any kind of legal status and, according to her, taxing ‘virtual digital transactions’ is the government’s sovereign right. She may be technically correct in saying that she can tax legal as well illegal activities but the latter should not be permitted in the first place, and one cannot compromise on this by taxing such activities.
Incidentally, on February 25, while dealing with a money-laundering case, the Supreme Court asked the Additional Solicitor-General: “We would like you to tell us how you are dealing with persons trading in Bitcoin and cryptocurrency. Is handling cryptocurrency still illegal in India?”
Further, the Finance Minister informed that a decision on whether or not the country will ban cryptocurrencies will be taken after consultations. This is amusing as the decision on this is pending for more than four years.
In April 2018, the Reserve Bank of India enforced curbs on crypto trading. However, cryptocurrency exchanges scored a victory after the Supreme Court endorsed their stand against the curbs put…
