Indian Regulators State That Cryptocurrency Is Not Illegal and Now Taxed as Gambling Winnings

The Indian regulators have stated that it will not treat cryptocurrency trading as an illegal activity a day after announcing a special taxing regime for crypto-related transactions that will be treated the same as winnings from gambling.

According to the regulator, cryptocurrencies remain in the “gray area,” hence it is not illegal to buy and sell cryptocurrencies or other digital assets, according to Finance Secretary T.V. Somanathan.

The framework for cryptocurrency payments and transactions will be similar to the taxation regime for winnings from horse races or from bets and other speculative transactions.

After years of consideration and discussion, the government budget has proposed taxing income from virtual assets transfers at 30%, which effectively moves cryptocurrencies into a “brighter” taxing framework.

Previously, the central bank of India released numerous warnings about the risks tied to the cryptocurrency industry that include money laundering, financing of illegal activities and volatility spikes on the market. India’s cabinet is yet to clear the law before sending it to lawmakers.

The government has not yet stopped the development of the regulatory framework around the industry. Regulators are still going to discuss the status of digital assets while comparing regulations’ experiences in other countries.

As for now, the government is going to tax any transactions tracked on citizens’ accounts while a more in-depth taxation framework is being developed.

Previously, the Indian government announced its first taxation plan for digital assets that includes taxation of incomes from the transfer of any digital asset at a rate of 30% and no expenditure deduction.