Taxing cryptos does not mean it has been legalized, says Sitharaman

New Delhi [India]: Union Finance Minister Nirmala Sitharaman on Friday said the imposition of tax on digital assets should not be seen as a precursor of legalization of cryptocurrencies.

Replying to the general discussion on Union Budget 2022-23 in Rajya Sabha, the Finance Minister said, "I am not going to legalize it or ban it at this stage. Banning or not banning will come subsequently when consultations give me input." In the Union Budget 2022-23 presented on February 1, the Finance Minister proposed to impose 30 per cent tax on income from the transfer of any virtual digital assets.

Sitharaman also announced the imposition of 1 per cent TDS on payment made in relation to the transfer of virtual digital assets. The move aims to capture the transaction details in digital currency.

Some market analysts see the imposition of taxes as a precursor of legalization of cryptocurrencies.

However, the Finance Minister clarified that the government has taken a decision to tax the profit emanating from cryptocurrencies transactions but no decision has yet been taken on regulation or legality of it. (ANI)