Private Crypto like Bitcoins not a legal Tender: Just because something is now taxed does not mean it is legal

Cryptocurrencies for example Bitcoin and Ethereum will never be legal, according to Finance Secretary TV Somanathan, who added that only the Reserve Bank of India’s (RBI) digital rupee will be legal tender.

Digital Rupee will be backed by RBI and the same will never default. Money will be issued by RBI, but it will be in digital form. The same will be a digital legal tender. Just like we purchase Ice-cream by spending money, we can purchase digital currency by giving Rupee through online platforms.

While many were speculating that now since Government has decided to tax crypto, the same in Legal. Well, this is not the case. For Example, smuggling is also taxed in Income Tax. It doesn’t make it Legal. People investing in crypto should understand that same comes without government backing. Additionally, if they lose money in the private crypto market, the government will not be responsible for the same.

In this Budget Government has decided to Tax Crypto at a rate of 30%. Additional no other expense except the cost of acquisition or set of losses is allowable as a deduction. Additionally TDS on CryptoCurrency at the rate of 1% is also introduced.

Does that mean Private Crypto is Illegal?

If something does not have legal backing, does not mean it is Illegal. The government is planning to bring a law on the regulation of the Crypto Market, so I feel that soon it will be regulated. But till then, the investor who is putting their money in private crypto are on their own as there is no government backing in this market.