The Minister of State for Electronics & Information Technology Rajeev Chandrasekhar on Thursday said that there was no issue with cryptocurrency until all the laws of India are followed.
He asked the investors to ensure that they follow the country’s laws and there was nothing legally that holds them back from investing in crypto.
Answering a query at an event, Chandrasekhar said, “There is nothing today that outlaws crypto as long as you follow the legal process. If you want to invest in crypto, make sure you go through the RBI, get your LRS eligibility, the dollars as per rules.”
The statement comes as a contradiction to Reserve Bank of India (RBI) Governor Shaktikanta Das’ statement last week, which saw him call for banning cryptocurrency in India. Das had likened crypto to gambling at the event.
India has been looking to come up with legislation on crypto but hasn’t been to formulate anything as such yet.
During the Union Budget 2022-23, Centre had levied flat 30 per cent tax on gains from VDA trade applicable from 1 April 2022. In July 2022, a levy of 1 per cent tax deducted at source (TDS) on transactions above Rs 10,000 was also introduced.
A recent study on the economic impact of India’s taxation framework for virtual digital assets (VDAs) revealed that there has been a shift of cumulative trade volume of about Rs 32,000 crore from domestic centralised virtual digital asset (VDA) exchanges to foreign ones, during Feb-Oct 2022. The study highlighted that a cumulative volume of Rs 25,300 crore was offshored within six months of the current financial year from the Rs 32,000 crore.
The Esya Centre study further said that implementation of the 1 per cent TDS had the most distortionary impact out of the three tax measures/events, as Indian VDA exchanges lost up to 81 per cent of their trading volumes in three and a half months between 1 July and 15 October, following the levy.