India is considering taxing bitcoin transactions and the economy as a whole.

New Delhi, India: A senior official told ET Now that the government is looking at methods to tax cryptocurrency trades and the entire system. The news comes as the cabinet prepares to vote on a draught bill governing cryptocurrency.

The government, according to ET Now, may allow the use of blockchain technology and treat cryptos as a tradable asset class without outright banning them.

FM Sitharaman has previously stated that the government does not want to close all alternatives and that citizens would be given enough opportunities to experiment with blockchain, bitcoins, and cryptocurrencies.

“Taxation of cryptocurrency would not lend any official recognition to it,” the official, who did not want to be identified and added “We are approaching cryptocurrency with the principle that any activity that generates income must pay tax,”

Meanwhile, former RBI Deputy Governor R Gandhi said that crypto transactions should be taxed based on payment methods.“Cryptocurrencies should be paid for through normal payment channels. If they are not, then it should be deemed as mined and capital gains tax must be levied. That is like voluntary disclosure. The transactions should be fully tracked through a repository,” Gandhi stated last week.

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