Budget 2022: Did FM just make cryptocurrencies legal by taxing them?

economictimes.indiatimes.com:

While this has boosted the morale of the industry, a lot of crypto enthusiasts are wondering if the Finance Minister just made cryptocurrencies legal. According to Purushottam Anand, Founder of blockchain law firm Crypto Legal, taxing income from cryptocurrencies does not necessarily and explicitly legalise cryptocurrencies because income tax is not concerned about the manner or means of acquiring the income.

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An income earned from both — legal or illegal activities – can be taxed under Income Tax Act, he added. «However, looking from a broader context, specific tax provisions for cryptocurrencies are a step towards legalisation.» The government has not made crypto legal under the Finance Bill, but it made the gains from it as taxable. «The right way to look at it is that the government has the right to tax unaccounted money, the same way it has the right to tax gains from crypto — be it legal or illegal,» said Harry Parikh, Associate partner, BDO India. Further, it is also highly unlikely that the government will collect tax from cryptocurrency transactions and will then introduce a bill to make cryptocurrencies illegal, Anand said. “A law to simply ban cryptocurrencies will hardly require any elaborate discussion,” he added. The government has made a tax claim on gains arising from cryptocurrencies and made it at par with speculative transactions, according to Parikh. However, the state can not tax anything illegal. This adds more weight to legal status of the crypto assets, but