India’s government has finalised a report that was submitted to the Financial Stability and Development Council (FSDC), so there should be clarity regarding the legality for cryptocurrencies in that country very soon.
In the next Budget 2023–24, it is unlikely that the Center would declare its choice regarding the legitimacy of virtual digital assets. But given that the FSDC will meet once again to consider the matter in June of this year, the Centre might make a definitive decision then.
“The Department of Economic Affairs (DEA) has finalised a consultation paper and submitted it to the Financial Stability and Development Council (FSDC). The DEA will also play a critical role in discussions with G20 countries about the legality of crypto assets. We are going to take up discussions under the international taxation agenda next month,” noted an official in the Ministry of Finance.
The centre has also received letters and notes asking for information about the regulatory framework, a demand to lower the 30% tax & the omission of the 1% TDS on virtual digital assets announced last year from investors and cryptocurrency firms. It is unlikely however, that the government will reverse its decision.
The government defined cryptocurrency as virtual digital assets in the Union Budget for 2022–2023 and levied a 30% tax on gains from such transactions. Additionally, starting on July 1, 2022, it imposed a 1% tax deducted at source on all such transactions. The administration made it clear that taxes does not mean that virtual digital assets are now lawful.