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Budget 2022: Did FM just make cryptocurrencies legal by taxing them?

Experts opined that the announcements may be a step towards legalisation, saying that a full framework will provide clarity
Last Updated : 02 February 2022, 17:39 IST
Last Updated : 02 February 2022, 17:39 IST

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The announcement made by Nirmala Sitharaman of a 30 per cent tax on digital assets, including cryptocurrency, has sparked the interest of the crypto community, who are wondering if the announcement signifies that cryptocurrencies are now legal.

Purushottam Anand, the founder of blockchain law firm Crypto Legal, told The Economic Times that the announcement does not "necessarily and explicitly" legalise cryptocurrencies, citing that income tax is not concerned about the manner or means of the income.

"Looking from a broader context, specific tax provisions for cryptocurrencies are a step towards legalisation," he was quoted as saying, adding that income earned from illegal activities can also be taxed under Income Tax Act.

"The right way to look at it is that the government has the right to tax unaccounted money, the same way it has the right to tax gains from crypto - be it legal or illegal," Harry Parikh, Associate partner, BDO India, told the publication.

Parikh told the publication that a simple law can do away with cryptocurrencies, while claiming that the state cannot tax anything illegal, giving weight to argument that cryptocurrencies are now legal.

Edul Patel, co-founder and CEO of Mudrex, told the publication that with the announcements, the government has taken a step towards "full-fledged legalisation" of cryptocurrencies.

"However, the detailed write up that would likely be released in the time to come would clear the air over the entire scenario. It is undoubtedly a very progressive step forward," he was quoted as saying.

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Published 02 February 2022, 14:01 IST

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