Is cryptocurrency legal in India? A bill has been tabled in India’s parliament, but the legislation has yet to be approved. This uncertainty means that it is unclear what the law will do to cryptocurrencies. But, a recent NDTV report states that violators could face fines of Rs. 20 crore and even US$2.7 million, if they do not stop violating the rules. And in the long run, it could lead to an 18-month jail term for violators.
A new draft of the bill is in the works. It will ban the use of cryptocurrency as money but will allow its use in other applications. However, it will make sure that cryptographic tokens issued by the government do not infringe upon the Indian Rupee. This could lead to a situation where the government incentivizes the blockchain industry to create tokens that are useless to the nation. As for the legality of cryptocurrency in India, it will be interesting to see if the new law is finalized.
Whether or not cryptocurrency will be legal in India is still unclear. Many people do not know the legal status of this new asset class, so they are not yet declaring them as assets. However, the government has been working on a new rule that will help bring certainty to taxation of cryptocurrencies. But that rule alone does not necessarily make it legal. It will ultimately depend on the final legislation in the Parliament. The underlying issue here is taxation.
