Cryptocurrency taxation ‘sovereign right’: FM Nirmala Sitharaman

Finance Minister Nirmala Sitaraman.

Responding to questions posed around Union budget 2022, particularly around cryptocurrency taxation and legalisation in the Rajya Sabha, FM Nirmala Sitharaman clearly noted that while the "profit emanating from transactions associated to cryptocurrency has been taxed, nothing has been done, at the moment, to legalise, ban or de-legalise it".

Noting that taxation is a "sovereign right", Sitharaman mentioned that a final decision on prohibition of cryptocurrencies in India, if any, would come only after due consultation from all stakeholders. She also called out various members of the opposition, stating that taxing cryptocurrency is a "corrective action", lest it is said that nothing was done despite the presence of a large quantum of profits emerging from this virtual asset class.

In a media interaction post the MPC announcements yesterday, RBI governor Shaktikanta Das had reiterated the apex bank's long-standing hostile stance of cryptocurrency, stating that "private cryptocurrencies are a big threat to India's financial and macroeconomic stability, along with RBI's ability to deal with the same."

RBI Monetary Policy | Governor Das’ tulip warning on crypto has a message for government

"I think it is my duty to tell investors that what they are investing in cryptocurrencies, they should keep in mind that they are investing at their own risk. They should keep in mind that these cryptocurrencies have no underlying asset. Not even a tulip!", he continued, referencing the infamous, 17th-century Tulipmania, one of the most prominent examples of speculative bubbles and market crashes.