India is likely to have clarity on the legality of cryptocurrency as the government has finalised a report that has been submitted to the Financial Stability and Development Council (FSDC).
It is unlikely that the Centre will announce its decision on the legality of virtual digital assets in the upcoming Budget 2023–24. However, the Centre may take a final decision by June this year, as the FSDC will again convene to discuss the same.
“The Department of Economic Affairs (DEA) has finalised a consultation paper and submitted it to the FSDC. The DEA will also play a critical role in discussions with G20 countries about the legality of crypto assets. We are going to take up discussions under the international taxation agenda next month,” said a Ministry of Finance official.
Centre has also received request letters and notes from investors and cryptocurrency startups regarding the regulatory framework, a demand to reduce the 30 per cent tax and the omission of the 1 per cent TDS on virtual digital assets announced last year. However, it is unlikely that the government will withdraw its decision.
In the Union Budget for 2022–23, the government defined crypto as virtual digital assets and also imposed a 30 per cent tax on gains made from such transactions. It also imposed a 1 per cent tax deducted at source on all such transactions, effective July 1, 2022. The government had clarified that taxation does not imply it has legalised virtual digital assets.
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