Before the introduction of a ban on cryptocurrencies, the Indian government plans to establish an income tax and a goods and services tax (GST, analogous to VAT) on the purchase or sale of cryptoassets.
Local media reported that the Indian authorities intend to increase budget revenues through double taxation of digital assets. Bitcoin will fall into the category of financial services. The commissions that traders pay to trading platforms for executing trades will be charged 18% GST. In addition, tax on income from cryptocurrency transactions must be paid.
The government did not disclose how the income from cryptocurrencies will be calculated. The authorities are aiming to “collect” both taxes for the period from April 2020 to March 2021. The Ministry of Finance of India is expected to publish an official document regarding the taxation of cryptocurrencies in India soon. Given that the Indian government is preparing to ban cryptocurrencies, these measures will be temporary.
Indian lawmakers are planning to present a bill to ban private cryptocurrencies at the current session of parliament. In addition, the possibility of issuing a digital rupee by the Reserve Bank of India (RBI) will be discussed. However, the content of the bill is still unknown, and the government has not yet indicated what constitutes “private cryptocurrencies”. Indian Finance Minister Anurag Thakur believes that the upcoming bill will fill the gaps in the country’s domestic policy.
WazirX CEO Nischal Shetty said that profits from cryptocurrencies are taxed like any other income and must be reported on income tax returns. Shetty added that WazirX regularly pays GST on commissions paid by customers on transactions. However, India’s Ministry of Finance believes that even if income tax or GST was paid for a transaction, it still does not make the transaction legal. Taxation and legality of transactions are independent of each other.
Many players in the cryptocurrency industry perceived a possible ban on digital assets with bewilderment, comparing it to a massive ban on the Internet.
Telegram channel!
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
