Notwithstanding the absence of legal clarity amongst Indian crypto ecosystem, the nation’s government may perhaps tax BTC trading at the standard GST rate of 18%.
India’s finance ministry has proposed the implementation of Bitcoin tax laws in the nation. As per the Times of India, the finance ministry’s Central Economic Intelligence Bureau, lately put forward a draft document that recommends imposing an 18 percent GST tax on Bitcoin transactions.
18% Goods & Services Tax and a Billion Dollar Earning
Interestingly, the Central Economic Intelligence Bureau figures projects the Bitcoin transaction volume in India at around five and a half billion dollars. Consequently, the anticipated 18 percent tax could lead the Indian government to earn around a billion dollars (approximately 970 million USD) from digital asset taxation.
According to the suggested plan, the Central Economic Intelligence Bureau is pushing for cryptocurrencies to be classified as “intangible assets” to fall under the horizon of GST with taxes imposed on the earnings made from trading.
Apropos the development, the CEO of Indian crypto policy advisory firm Policy 4.0, Tanvi Ratna tweeted:
“Sadly, this does not necessarily imply that crypto will be legal. Under Indian law, illegal income is also taxable & evading its tax counts as criminal activity.”
Back in the year 2011, the finance ministry of India provided elucidation that tax circumvention on prohibited sources of income was a punishable offense. At the time, the Indian government was purportedly moving toward reclassifying all arrangements of tax skirting as illegal wrongdoings.
What do you think about the latest development on suggested taxes on crypto in India? Let us know in the comments below!