A proposal to levy a 30% tax on cryptocurrency income was seen by many investors and exchanges as a step toward legitimizing the industry.
Last Friday, however, Finance Minister Nirmala Sitharaman reiterated that taxing cryptocurrency does not make it legal, and that the government has the sovereign right to tax income obtained by legal or illicit means.
T.V. Somanathan, the finance secretary, stated on February 2, that taxing cryptocurrency is similar to taxing gambling, and that legality is still a fuzzy issue.
Both Karad and Sitharaman stated that no decision has been made on whether or not to prohibit or legalize cryptocurrency in the country, casting doubt on the expectations of investors and exchanges.