Is cryptocurrency legal in India?

Yet again, the Apex Court has come to citizens’ rescue. This time around by becoming the voice of thousands of cryptocurrency investors in the country. The Centre through the Budget session of 2022, imposed 30% tax on virtual digital assets like cryptocurrency. However, Finance Minister, Nirmala Sitharaman later on said “I am not going to legalise it or ban it at this stage. Banning or not banning will come subsequently, when consultations give me input.” This dual stance of the government over trading of private cryptocurrencies baffled netizens and they demanded clarity over the subject.

On 25th February 2022, a Supreme Court bench led by Justice D.Y. Chandrachud, was hearing the case of Ajay Bhardwaj v Union of India and others (GainBitcoin Scam). Justice Surya Kant asked the Additional Solicitor General, Aishwarya Bhati to clarify on record the government’s stance over the trade of cryptocurrencies. The nation’s eyes are on the government’s submission to the Apex Court.

Interestingly, In November 2021, the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 was introduced which aimed at creation and facilitation of India’s own and official digital currency. This digital currency is to be issued by the Reserve Bank of India. The bill also sought to prohibit the investors from trading in private cryptocurrencies with certain exceptions regarding underlying technologies.

Currently there are no prohibitions on trading in private cryptocurrencies however, as stated above, 30% tax is imposed on profits earned by investors from private cryptocurrencies. In the meanwhile, we await government’s response to the SC’s query.


Disclaimer:

The content of this article is intended to provide general guidance on the subject matter. Specialist advice should be sought about your specific circumstances.


Key Words: Cryptocurrency, Supreme Court, 30% Tax, Clarify, Government.

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