Is Crypto now LEGAL in the country

 Is Crypto now LEGAL in the country? After 30% tax, if you also consider it legal then find out what is the reality

Cryptocurrency: Crypto investors will be disappointed after this budget announcement and some people involved in its business will be happy. Fortunately, many are claiming that cryptocurrency has now become legal in the country. It is also clear from the fact that immediately after the budget was announced there was a reaction from the cryptocurrency exchange WazirX, Coinswitchkuber that the government's move was good. But, there is a bit of confusion here. First let us understand what the finance minister said and where the people are making a mistake.

The discussion of cryptocurrency is growing day by day. This time the budget also makes special provision for crypto. What we are considering as cryptocurrency and what the finance minister has called virtual assets will be taxed at 30%. This was the only issue in Budget 2022 that caught everyone's attention.

Investors in Crypto must have been disappointed with the announcement in the budget, and some in the business would have been happy. Fortunately, many are claiming that cryptocurrency has now become legal in the country. It is also clear from the fact that immediately after the budget was announced there was a reaction from the cryptocurrency exchange WazirX, Coinswitchkuber that the government's move was good. But, there is a bit of confusion here. First let us understand what the finance minister said and where the people are making a mistake.

Digital currency, not asset tax

First, understand that taxes are levied on cryptocurrencies such as digital assets or bitcoin, which are not currently legal. It is noteworthy that the government does not consider it as a currency. So now in India, income from cryptocurrency will be taxed at 30%. This means that now if a person earns a profit of Rs 100 by investing in digital assets, he will have to pay Rs 30 as tax to the government.

The government will also levy TDS on transactions.

For each cryptocurrency transaction, 1% TDS (tax deduction at source) must be paid to the government separately. Suppose someone buys some cryptocurrency. This is their investment. Meaning that this wealth happened to him. Now if the buyer transfers this property to someone else, he will have to pay TDS separately at the rate of 1% on the total value of that property. TDS is levied on any source. The tax that the government collects on your monthly salary is TDS. Overall, the government is considering digital currency as a source of revenue. His earnings are also taxed at 30%.

So is cryptocurrency legal?

After this announcement in the budget, the question in the minds of most people is whether the government has legalized digital currency by imposing a tax on it. The answer is no. Think of it this way, the government only legalizes digital currency that has been or will be issued by the Reserve Bank of India-RBI. This means that cryptocurrencies such as Bitcoin, which currently exist, are not valid. After the budget speech, in a question-and-answer session with reporters, the finance minister clarified that the legality of crypto is being discussed in the government, but no decision has been taken yet. He said that whatever cryptocurrency is outside the framework of the central bank is not a currency. If someone tells you that it has become legal, you will not believe it unless the government says so. It may be noted that the government is also preparing to introduce its own digital currency in the business year starting from April, which was mentioned by the finance minister in his speech. Obviously, this currency would be perfectly legal.

Why the confusion over crypto?

As soon as the 30 percent tax on virtual assets was announced, many people assumed that whatever came under the tax net became legal. However, this is not the case. According to the Income Tax Act, wherever your income is, the government levies tax on it. This does not guarantee that your income is legal. According to tax expert Ved Jain, the income tax provision makes it clear that income received from anywhere will be taxed as per the tax slab. The Supreme Court had earlier ruled in the same case in a smuggling case. Therefore, it is not appropriate to say that the tax on such property is legal.

What does the finance minister mean by virtual assets?

Simply put, the gold you buy or the house you buy is your property. Meaning your property, not currency. Similarly, cryptocurrency will be an asset to the Government of India and people will be taxed on it. If you are thinking that digital currencies like Bitcoin, Etherium, Tether, Ripple are considered legal, then it is not technically correct at all. However, people will be able to invest in it.

શું Crypto હવે દેશમાં LEGAL છે? 30% ટેક્સ પછી, જો તમે પણ તેને કાયદેસર માનતા હોવ તો જાણો શું છે વાસ્તવિકતા

ગુજરાતી મા વાચવા અહિ ક્લિક કરો

What is the purpose of the government behind this tax?

Government officials also said that cryptocurrency transactions in the country have been on the government's radar since 2017. Taxing it is sure to bring huge sums of money to the exchequer. At present governments in the United States, Britain, Italy, the Netherlands and Australia levy taxes on virtual currencies. One of the major reasons behind the government's decision may be that the number of people investing in cryptocurrency in our country is about 8% of the country's population. According to RBI data, these people have invested Rs 70,000 crore in such virtual currencies at present. Indians are at the forefront of the cryptocurrency trade worldwide. Simply put, this 30 per cent tax will directly guarantee an investment of Rs 70,000 crore and in India