The government of India has stated that cryptocurrencies will never be considered as legal tender. India’s finance secretary, T.V. Somanathan, clarified while speaking with Asia News International today that only the Rupee and the yet-to-be-released digital Rupee have legal tender status in the country. The statement is coming after India’s finance minister yesterday announced that crypto gains will be taxed at 30%.
Bitcoin and other digital assets will never become legal tender in India
India’s secretary of finance, T.V. Somanathan, has squashed misconceptions around the recently announced crypto taxation scheme. Speaking in an interview with Asia News International (ASI) today, Somanathan stated that the only currency that will ever be considered as legal tender in India is the Rupee and its digital counterpart.
Digital currency will be backed by the RBI which will never default. Money will be from the RBI but its nature will be digital. Digital rupee issued by RBI will be a legal tender. Rest all aren’t legal tender, will not, will never become legal tender, Somanathan said.
He adds that cryptocurrencies do not have the authorization or backing of the government. Hence, crypto investors are trading the digital assets at their own risk as the government had no responsibility for losses incurred.
Profits from crypto trading will still be taxed
The clarification is coming after India has for the first time given cryptocurrencies legal recognition by proposing a taxation scheme for digital assets in its latest budget. India’s minister of finance, Nirmala Sitharaman, yesterday announced that profits from crypto trading will be taxed at 30%. The taxation scheme will also include a 1% tax for payments made with crypto as well as a tax on crypto one receives as gifts.
Remarkably, the taxation regime they introduced is a turnaround from the government’s previous stance on banning the entire crypto industry. India has in the past even considered making it trading cryptocurrencies a crime. Last year, a member of the parliament went as far as calling for the ban of Crypto. More regulations of the crypto industry are currently expected in the country as there is a bill in India’s parliament that is slated to be debated on in the next parliament session this February.