Budget 2022: In Union Budget 2022, FM Nirmala Sitharaman announced heavy taxation on cryptocurrency. The tax levied on Virtual Digital assets is 30% in Union Budget 2022. From an outright ban on cryptocurrencies in 2016 to an upcoming Bill for regulation—the government’s stance on virtual digital assets has changed considerably over the past few years in India. The upcoming Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 is different from the earlier one – ‘Banning of Cryptocurrency and Regulation of Official Digital Currency Bill, 2019.’
While the older law sought to impose a complete ban on all crypto-related activities including mining, buying, holding, selling, and dealing, the new one will look to make a clear distinction when it comes to its often used categorisation as a currency.
Currently, there is no regulation or any ban on the use of cryptocurrencies in the country. The Reserve Bank of India’s (RBI) order banning banks from supporting crypto transactions, was reversed by the Supreme Court order of March 2020.
The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 is listed for introduction in Parliament’s Winter Session seeks to prohibit all “private cryptocurrencies” in India. However, it allows for certain exceptions to promote the underlying technology of cryptocurrency and its uses.