The Indian Income Tax Department is rumoured to be considering charging crypto traders and crypto exchanges shortly. Indian entrepreneurs believe crypto tax laws are foundational to mainstream crypto acceptance by governments.
According to a report by ET Now, India’s tax department, which is part of the Ministry of Finance, has expressed interest in taxing crypto revenues through trade and exchanges. However, according to the sources, the action will not grant cryptocurrencies a genuine asset class position.
Nischal Shetty, CEO of WazirX crypto exchange, said that having clarification on crypto-related Goods and Services Tax (GST) will aid in determining the asset class of cryptocurrencies:
“It’s a no-brainer that your crypto earnings are taxable like other income and should be declared in the Income Tax Returns. As of now, it is not clear whether the GST would be applied on the amount of cryptocurrency bought or on the transaction fees paid by the user.”
According to the initial report, the Indian government feels that any actions that create cryptocurrency money should be taxed. However, the cabinet’s soon-to-be-released legislative proposal will provide additional clarity on this decision.
“We have conveyed our serious and big worries about cryptocurrencies to the government from the point of view of financial stability,” said Reserve Bank of India Governor Shaktikanta Das on September 9.
Indian investor Evan Luthra of Luthra Group told Cointelegraph that taxing digital currencies “is a positive thing,” citing the possibility of a pending parliamentary bill on the subject.
“I think investors and potential investors have nothing to be scared about. Governments that realize the true potential of cryptocurrencies and bring in policies to support the innovation will be the leaders of the future.”
On January 25, the Reserve Bank of India (RBI) released a pamphlet that examines the applications of a digital form of fiat currency.
While the government sees only two feasible choices for cryptocurrency: adoption or outright prohibition, the RBI has plans to develop its own CBDC if “there is a need.”
