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People see future in crypto, govt sees source of tax revenue: FM Sitharaman

Finance Minister Nirmala Sitharaman said Tuesday she sees possibility of revenue generation for the government through crypto assets, days after government proposed a tax of 30% on income from cryptocurrencies and other digital assets in Budget.

People see future in crypto, govt sees source of tax revenue: FM Sitharaman
Finance minister Nirmala Sitharaman. (Photo source: PTI)

Finance Minister Nirmala Sitharaman said Tuesday she sees possibility of tax revenue generation for the government from crypto assets, days after the government proposed a tax of 30% on income from cryptocurrencies and other digital assets in the Budget. “Many Indians have seen a future in crypto, therefore I see a possibility of revenue in it,” Sitharaman said Tuesday at India Global Forum, when asked if she sees a future of crypto in the country.

The Finance Minister reiterated her view on the issue of legalising cryptocurrencies and said the consultation on crypto is currently ongoing. Once the consultation is done and the ministry has mulled over all the legal requirements for crypto law, the government will look at the opposition to it and discuss if crypto needs to be regulated, she said.

She was asked the question on crypto regulation by Coinswitch CEO Ashish Singhal, who said he supports taxation on crypto assets. Industry is divided on regulation of crypto. Some say that the government’s decision to tax crypto is its recognition of the industry; others say the government is disincentivizing people who invest in crypto by imposing a tax of 30%.

Earlier, in February, Sitharaman had said that the government has only taxed the profits from cryptocurrency transactions, and not done anything to legalise or ban or regulate it. She also said that the ministry, central bank and the government are on board with it. “Whatever decisions the government or RBI takes, is taken after discussions. All the decisions which have been taken on it, obviously it is very serious, it is a digital currency from the central bank of some description, so obviously with more focus having had consultations,” she said last month.

On the other hand, RBI governor Shaktikanta Das has reiterated his caution towards crypto and said it could impact financial stability. In the MPC meeting, the governor said crypto does not have an inert value and is not even a tulip. The central bank is currently working to launch its own digital currency in the upcoming fiscal year.

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First published on: 08-03-2022 at 11:33:22 am