Cryptocurrency gains could be taxed as government plans to change tax laws in budget

Bajaj said that in terms of income tax, some people are already paying capital gains tax on income from cryptocurrencies, and with regard to the Goods and Services Tax (GST), the law is “very clear” that the rate is will be applicable on In case of other services.

“We’ll take a decision. I understand people are already paying taxes on it. Now that it’s really increased, we’ll see if we can actually bring some change in the state of the law. But It will be a budget activity. We are already close to budget, we have to look at that time,” Bajaj told PTI in an interview.

When asked whether the provision of TCS (Tax Collected at Source) can be introduced for crypto trading, the secretary said, “If we come out with a new law, we will see what has to be done.”

He said, “But yes, if you earn money then you have to pay tax… We have already got some tax, some have treated it as an asset and have paid capital gains tax on it. “

When asked whether those involved in cryptocurrency trading would be classified as facilitators, brokerages and trading platforms and how they would be taxed under GST, Bajaj said, “Such things will already be available in other services as well. Therefore, they are taxed at whatever rate of GST, which will be applicable to them.”

He said, “They have to get themselves registered. The GST law is very clear. If there is any activity, if there is a broker who is helping people and is charging brokerage fee, then GST will be charged.”

Separately, the government is likely to introduce a bill on cryptocurrencies during the winter session of parliament that begins on November 29, amid concerns about such currencies purportedly used to lure investors with misleading claims. He is going.

Notably, in recent times there has been an increasing number of advertisements featuring movie stars, promising easy and high returns on investment in cryptocurrencies.

Currently, there is no regulation or any restriction on the use of cryptocurrencies in the country. Against this backdrop, Prime Minister Narendra Modi last week held a meeting on the cryptocurrency with senior officials and indicated that stronger regulatory steps could be taken to tackle the issue.

Earlier this week, the Parliamentary Standing Committee for Finance met various stakeholders and experts, a first for a panel on cryptocurrency and related issues. The panel emphasized the regulation of crypto but did not completely close the door on them.

Members of the parliamentary panel are said to have wanted government officials to appear before it and address their concerns. It was agreed that a regulatory mechanism should be established to regulate cryptocurrencies. Industry associations and stakeholders were not clear on who should be the regulator

MPs have expressed concern about the safety of investors’ money.

India has had hot and cold relations with digital currencies over the years. In 2018, it effectively banned crypto transactions following a string of frauds following Modi’s abrupt decision to liquidate 80% of the country’s currencies, but the Supreme Court lifted the ban in March 2020.

After the Supreme Court overturned the RBI order, which effectively lifted the ban on cryptocurrency trading in India, the craze in the country has increased at a furious rate.

Subsequently, on February 5, 2021, the central bank constituted an internal panel to suggest the model for the central bank’s digital currency.

An inter-ministerial panel on cryptocurrencies, headed by the Secretary (Economic Affairs), had recommended that all currencies except those issued by the state should be banned.

RBI has repeatedly reiterated its strong views against cryptocurrencies, stating that they pose a serious threat to the country’s macroeconomic and financial stability and the number of investors trading on them as well as their claimed Doubt the market value as well.

One possibility that is being explored in the government is that cryptocurrencies may be banned for transactional use or payment, but according to various reports, they are allowed to be held in the form of assets such as gold, shares or bonds. Is given.