Sunday, February 5, 2023

India Likely To Impose Income Tax And GST On Crypto Gain

Indian Government is considering imposing both direct and indirect taxes on cryptocurrencies, according to a report.

The local media outlet, in its report, mentioned, “One of the key issues is taxation. If there is gain or income from crypto, it should be taxed per capital gains rules. Similarly, if there is service involved in the transaction, then GST needs to be levied.”

The news came before the upcoming Winter Session of Parliament. It is being expected that the government might present the crypto bill during that session. The bill might involve details regarding crypto income tax and Goods and Services Tax (GST).

The upcoming Parliamentary Session is considered to be very important for the Indian crypto industry, especially, because recently, the government softened its stance over cryptocurrency in the country.

Notably, India is neither going to impose an absolute ban on cryptocurrency nor is planning to grant it a status of a legal tender in the country.

After the bill is discussed in Parliament, it will offer more clarity about crypto regulations in India. The speculation is also being made that the government might also levy tax on cryptocurrency and the trading platforms might also have to pay 18 percent GST. 

The report by local media further informed, “The Indian government is planning to compartmentalize virtual currencies and their tax treatment on the basis of their use case — payments, investment, or utility.”

After the bill is approved the private cryptocurrencies would get the status of investment in India, for taxation purposes. Like India, now other countries are also working on their bill to regulate cryptos. 

It was reported earlier that Japan would also be introducing strict tax rules for crypto gains. The country would be imposing 45 percent of the tax on the highest crypto gains. 

Meanwhile, the US Congress has started working on the infrastructure bill, which includes tax reporting requirements for crypto investors.

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