Crypto tax doesn’t legalize trading, according to Indian tax department chief

The chief of the Central Board of Direct Taxes (CBDT) in India said the recent announcement of a 30% tax on crypto holdings doesn’t necessarily make crypto trading legal in India.

The finance minister of India announced a 30% tax on crypto holdings during the budget session on February 1, bringing about several headlines with the lines “India legalizes crypto”. However, CBDT chief JB Mohapatra debunked these misconceptions.

Mohaptra said that the new crypto tax would help the income tax department measure the depth of the digital currency market in the country. He also stressed that imposing a tax on the nascent crypto market doesn’t necessarily legalize its trade in the country. He explained:

“The crypto trade or the digital assets transactions do not ipso facto become legal or regular just because you have paid taxes on that.”

The tax department head added that the legality of the crypto trade could be determined only after a clear national framework is introduced in the parliament. However, he justified the tax imposition claiming it would help the department to track illicit activities associated with digital assets. He also advocated for regulating the crypto market to track the flow of money going in and out of the digital asset ecosystem.

Source: Cointelegraph.com