LEGALITY OF CRYPTOCURRENCY IN INDIA: WAY FORWARD

Abstract

Cryptocurrencies have long garnered attention of the financial world, revolutionized the commercial world to a large extent by providing virtual digital assets which can be used as something of value in digital ecosystem through “cryptocurrency wallets”1 like Exodus, Coinbase wallet, Atomic, etc. In modern economy due to advancement of technology these currencies are gaining popularity among the consumers. Some countries have acted swiftly to regulate it in order to reap maximum benefit of this new product, while some countries like India is still observing it and not accepting it full-fledged. The finance bill 2022 added section 115BBH to Income Tax Act,1961 which made income from transactions in virtual digital assets taxable at 30%(plus surcharge and educational cess) without any deduction except for the cost of acquisition. With effect from 1st April 2022 Income Tax department has already prescribed the form regarding it. A column has been added in ITR 2 to be filled with details like date of acquisition, date of transfer, cost of acquisition, profits or losses from such asset etc. As per these observations it can be deduced that Indian government is working dynamically to frame a robust regulatory framework which is incumbent. Cryptos are ready to resume their propensity to outperform most traditional assets. In the article various facets of the cryptocurrency that should be considered and understood, keeping in mind the Indian legal framework will be researched and discussed.