The Indian Government is currently weighing a proposal to impose a Goods and Services (GST) tax on Bitcoin at 18%
According to the report, the central government of India is currently considering a proposed Goods and Services (GST) tax on Bitcoin, estimated to amount to Rupees 40,000 ($ 5.45 billion) annually. There is a high possibility that the Indian government has aimed to be able to impose an 18% tax on Bitcoin transactions in the country.
Goods and Services (GST) tax India considers the proposal to tax Bitcoin transactions at 18%
The Central Bureau of Economic Intelligence (CEIB), an affiliate of the Ministry of Finance, made this proposal. They are said to be investigating the possibility of cryptocurrency taxation in India. Goods and Services (GST) tax will treat Bitcoin as an intangible asset, and GST can be imposed on all transactions.
It is known that CEIB has also proposed to treat cryptocurrencies as intangible assets, allowing GST to be calculated on the profits made in its trading. This is a substantial amount if imposed on every Bitcoin transaction. Because, India currently ranks second in Asia, because it is the country with the most Bitcoin transactions.
According to data from Paxful, India traded a total of $ 74,915,214 worth of Bitcoins in 2020 alone, up 347% from 2019.
This dramatic increase in crypto trading comes after the Supreme Court lifted a two-year ban imposed by the Reserve Bank of India (RBI) on the trading of cryptocurrencies by banks. and the financial institution.
There is currently no regulatory regulator for cryptocurrencies in the country, and domestic crypto exchanges continue to operate without the burden of regulatory compliance for the time being.
However, it is uncertain how the potential implementation of such a tax on cryptocurrencies could impact the crypto trading environment in India.
The tax authority has not yet categorized returns from cryptocurrencies under any specific bracket. The clarity on the tax and regulation front may bring more investor participation. While the Indian government does not consider bitcoin legal tender, holding cryptocurrencies is not necessarily illegal or banned.
Back in September, the government was reportedly mulling a new law prohibiting cryptocurrency trading. However, the government would be better off legitimizing bitcoin by regulating it like corporate stock.
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