Finance Minister Nirmala Sitharaman said that taxing crypto income and other virtual digital assets should not be seen as legitimizing them. Rather it is a way to track the source and trail of the assets, not to legitimize them,
Finance Minister about tax on crypto
As a part of a high-level panel discussion organized by the IMF, Sitharaman stated that as long as crypto-assets were handled through an unhosted wallet, there was a risk of money laundering and terror financing.
As a result, Sitharaman said countries will be able to execute cross-border payments with great ease.
“The risk which worries me more on the non-governmental domain is essentially you’re looking at unhosted wallets across the borders, across the globe… So, regulation cannot be done by a single country within its terrain through some effective method, and for doing it across the borders, technology doesn’t have a solution that will be acceptable to various sovereigns at the same time applicable within each of the territories,” News agency PTI quoted Sitharaman as saying.
Crypto risk will have to be approached differently depending on the economy for each use case, the Finance Minister said.
During the panel discussion on ‘Money at a Crossroad: Public or Private Digital Money?’,
As Sitharaman pointed out any regulation using technology should be so adept and nimble that it can’t be behind the curve. It needs to be ahead, and if any country thinks it can handle it.
Union Budget 2022-23 proposed a flat 30 percent tax on cryptocurrency transactions.
The Finance Minister said she would take all steps to prevent the country from becoming a haven for cryptocurrencies and to restrict their use as a medium of exchange. Tax on income from transaction tax on crypto transfer above a certain threshold.
On the Central Bank Digital Currency (CBDC), Sitharaman said it is going to happen sometime in 2022.