Effects of the legal status of crypto on Indian investors
With announcement that crypto will not be a legal tender, what will be the effects on crypto investors?
What are the effects of the legal status of crypto on Indian investors? Of late, the status of crypto undergoes changes in India.
On 1st February 2022, Union Budget declares that virtual digital assets inclusive of crypto is subject to taxation at 30%. On 2nd February 2022, Revenue Secretary Tarun Bajaj announces that crypto will have a separate column in income tax return forms. It is releasing from next year onwards. The gains from crypto’s transaction are subject to declaration in it. On 3rd February, in a meeting with PTI, Finance Secretary, T V Somnathan, announces that crypto will not be a legal tender.
The effects of the legal status of crypto on Indian investors:
Investors in cryptocurrency of private players in India may face concerns. However there are a few things that they can note:
- Firstly, India’s digital currency will be launched in 2023. Thus, Digital rupee will be a legal tender. Also, it will be used as a currency. Investors can explore it.
- Investors in private cryptocurrencies might have to wait. As Cryptocurrency and Regulation of Official Digital Currency Bill undergoes consultations and feedbacks. The bill is waiting in the queue. Somnathan says that taking feedback is an essential part of a democratic framework. He also adds that the matter of taxation could not wait. However, feedbacks are helping reach conclusion.
- Any move on cryptocurrency will also depend on international consensus. It is because crypto includes cross-border transactions. Thus, investors should keep an eye on international moves on crypto to predict the legalities of the bill.
