Regulation of Bitcoin in India
In February 2022, in India, the Indian government proposed to introduce taxation on virtual digital assets, which would imply a taxation system for cryptocurrencies, but there is no clarity on whether the Indian government finds cryptocurrencies legal either as “asset” or “currency”.
India’s Finance Minister has categorically stated since then that “taxing cryptocurrencies doesn’t mean legalizing them.” This indicates the government is still evaluating all the factors associated with cryptocurrencies and it would be early to make any assumptions on their legality.
In other words, the bill that gives crypto the ultimate legitimacy or makes it legal will take time to come but the government is not waiting for that to happen before taxing people. India is awaiting crypto-specific legislation to be introduced in the parliament, deliberated upon and then passed by both houses to establish whether crypto is legal, meaning it can be accepted as an everyday speculative asset or as anything but a legal tender or form of money to buy and sell anything.
Whether crypto is legal, how much citizens have to pay in taxes, whether crypto could still be banned and how non-fungible tokens (NFT) fit into India’s regulatory framework are just some of the questions the crypto-curious citizen wants answered.
CoinDesk spoke to more than 20 experts, including government officials, lawyers, policy experts, executives at exchanges and tax professionals, to find the most simple and accurate answers.