‘Government does not recognise cryptocurrency as legal tender’

The Finance Ministry on Tuesday informed the Rajya Sabha that the number of ‘billionaires’, in terms of income tax payers, had more than doubled during assessment year or AY 2019-20 (fiscal year 2018-19) but reduced a bit in AY 20-21 (fiscal year 2019-20). In response to another question, it reiterated that it does not consider cryptocurrencies legal tender or coin.

Taxpayers

In her written reply to a question on the number of billionaires, Finance Minister Nirmala Sitharaman clarified that there is no legislative or administrative definition of the term ‘billionaire’ under direct taxes. Wealth tax has been abolished with effect from April 1, 2016; therefore, the Central Board of Direct Taxes (CBDT) no longer captures information about the complete wealth of an individual taxpayer.

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She informed that 77 individuals had disclosed a gross income higher than ₹100 crore (one billion rupees) in a year in their return of income during AY 2018-19, and their number rose to 141 the next year before falling to 136 in AY 2020-21.

Crypto-currencies

In response to another question, Minister of State in the Finance Ministry Pankaj Chaudhary said in a written reply: “The Government does not consider cryptocurrencies legal tender or coin and will take all measures to eliminate use of these crypto-assets in financing illegitimate activities or as part of the payment system. The Government will explore use of block chain technology proactively for ushering in digital economy.”

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Further, he mentioned that a high-level inter-ministerial committee (IMC) constituted under the chairmanship of the Secretary (Economic Affairs) to study issues related to virtual currencies and propose specific actions had recommended prohibiting all private cryptocurrencies, except any issued by the State. “The Government would take a decision on the recommendations of the IMC and the legislative proposal, if any, would be introduced in the Parliament following the due process,” he said.

Seizure of govt assets abroad

Replying to a question, Chaudhary said an order has been passed by a French court freezing certain Indian government properties in the case pertaining to Cairn Energy. This had been communicated through diplomatic channels. Counsels with relevant experience have been engaged to handle the enforcement proceedings. In consultation with its counsels, the government is taking legal steps to protect its interests. He also informed that the Taxation Laws (Amendment) Bill, 2021, passed by Parliament, is expected to reduce litigation.

“Government of India is not in receipt of any investment arbitral tribunal award against the Republic of India that in itself allows for the seizure of Government of India properties held abroad,” he said.