India plans to impose an additional 2% tax on Bitcoin and cryptocurrencies purchased abroad

The equalization tax could make cryptocurrencies more expensive for users and exchanges in India.

Bitcoin and other cryptocurrencies bought from overseas exchanges could cost Indian investors additional taxes while the tax department reviews whether cryptocurrencies are subject to a balanced% tax rate, Economic Times News.

Google tax

Foreign e-commerce services in India are subject to a net tax, also known colloquially as the “Google tax,” but experts are still unsure how this applies to electronic money.

“According to the new balanced tax interpretation and definition, it looks like it will be applied to cryptocurrencies bought from exchanges outside of India,” said Girish Vanvari, tax expert and founder of a private equity firm. He added:

“Without guidance, dealing with crypto assets under tax laws and the foreign exchange regulation law would be rather ambiguous.”

As explained by Girish Vanvari, the tax, usually for overseas companies, is on the selling price, which means exchanges can add it to the price of the cryptocurrency.

Lack of specific instructions

In 2020 India expanded the scope of equal taxation to include “e-commerce services and supplies”, not excluding business-to-consumer transactions.

The Finance Act 2021 clarifies that the balanced tax now fully includes online marketplaces that act as intermediaries between buyers and sellers, as it clarifies provisions not defined in the Finance Act.

India has not yet classified cryptocurrencies and the lack of a regulatory framework makes it harder to understand the implications of a net tax.

Indian lawmakers have recently taken different positions on Bitcoin, from banning it to being classified as an asset class.

Teacher

According to Cryptoslate

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