Government to ban all private cryptocurrencies, foster framework for official digital currency

New Delhi: According to the legislative schedule announced on Tuesday evening, the Cryptocurrencies and Regulation of Official Digital Currency Bill (2021), which attempts to regulate cryptocurrency in the country, will be tabled in the forthcoming winter session of Parliament. The bill aims to outlaw all private cryptocurrencies in India, with some exceptions to promote the technology and its applications.

The move comes amid worries that such currencies are being used to deceive investors with false claims and fund terrorist activities, according to previous reports.

The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 "seeks to prohibit all private cryptocurrencies in India, but it provides for specific exceptions to encourage the underlying technology and its usage," according to the bill. According to the statement, the law aims to provide a facilitating environment for the formation of the official digital currency to be issued by the Reserve Bank of India.

The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021is among the 26 new bills on the agenda of the government for introduction and passage during the winter session which begins on November 29.

Revenue Secretary Tarun Bajaj said in an interview with PTI that the government will examine changing the income tax regulations to include cryptocurrencies under the tax net. These adjustments may be included in the yearly budget for the coming fiscal year.

He went on to say that some people were already paying capital gains tax on their cryptocurrency profits. He replied that the GST laws were extremely clear. Taxation would be levied at the same rate as it is for other services.

According to the Revenue Secretary, the government would use existing rules to classify facilitators, brokerages, and trading platforms, as well as the taxing methods used by other platforms that provide similar services. He stated that whatever GST rates applied to them would also apply to cryptocurrency transactions.