India’s income tax authority could soon target cryptocurrency exchanges and ecosystems
With Indian income tax ministry reportedly considering taxing crypto traders and crypto exchanges soon, experts believe investors should rest assured.
According to ET Now’s The report, the tax department, which reports to the Indian Ministry of Finance, has signaled an interest in taxing cryptocurrency revenues through trading and exchanges. However, sources claim that the move will not allow the cryptocurrency to have a valid position in the asset class.
Speaking to Cointelegraph, Indian businessman Nischal Shetty, CEO of the WazirX crypto exchange, said that a clear understanding of crypto-related goods and services tax (GST) will help determine the cryptocurrency’s asset class:
“It goes without saying that your crypto income, like any other income, is taxable and must be reported on your income tax return. It is currently unclear whether the GST will be applied to the amount of cryptocurrency purchased or to the transaction fees paid by the user. “
With that in mind, the first report suggests that the Government of India believes that all income generating activities using cryptocurrencies should be taxed. However, an upcoming legislative proposal from the cabinet will provide more clarity on the decision.
On September 9, the Governor of the Reserve Bank of India Shaktikanta Das expressed concern about cryptocurrencies such as Bitcoin (BTC): “We have transferred our serious and greatest concerns about electronic money from a financial stability perspective to the government.”
Citing the possibility of crypto tax legislation, the Indian investor Evan Luthra of the Luthra Group told Cointelegraph that the taxation of cryptocurrencies is “a good thing”.
“I think investors and potential investors have nothing to fear. Governments that recognize the true potential of cryptocurrencies and put in place policies to support innovation will be the future leaders. “
Related: Former reserve bank officials are urging India to accept cryptocurrencies
The Reserve Bank of India (RBI) published a brochure on January 25th examining the use cases of a digital version of the fiat currency.
While the government sees only two possible options for cryptocurrencies, adoption and total ban, the RBI plans to launch its own version of CBDC if “the need arises”.