GST Council considering imposing 28% tax on bitcoin, other cryptocurrencies
In what could further worsen the mood of crypto investors in the country, the Goods and Services Tax (GST) Council is considering imposing a 28 per cent tax on cryptocurrency, which is equivalent to the current GST on casinos, betting and lotteries, multiple media reports. claimed in. on Monday.
According to reports, if the resolution is passed in the next GST meeting, sales and purchases as well as services like crypto mining are likely to attract 28 per cent GST. The date for the next meeting of GST is yet to be decided.
The Finance Ministry has already imposed a 30 percent tax on profits arising from the transfer of crypto assets and non-fungible tokens (NFTs).
India differentiates between cryptocurrency and crypto assets, and Union Finance Minister Nirmala Sitharaman in February announced a 30 per cent tax on income from these transactions during the Union Budget 2022-23, which includes a deduction of 1 per cent at source.
His proposal to impose a 30 percent tax on crypto income took effect from 1 April.
The 28 percent GST will be in addition to the 30 percent income tax on income from crypto asset transactions.
There is also 1 per cent TDS (tax deducted at source) on transactions in such asset classes in excess of a certain limit. Gifts in crypto and digital assets are also taxed.
A new section named ‘115BBH’ has been added in the Income Tax Act, 1961 to levy tax on digital assets.
During her visit to the US last month, Sitharaman raised doubts about the size of the worldwide cryptocurrency market and stressed the need for a regulatory mechanism acceptable to all countries, to prevent money laundering and its use to fund terrorism. What he said was big. A matter of concern for India.
Speaking at a seminar organized by the International Monetary Fund (IMF), Sitharaman said, “I think the biggest risk for all countries across the board will be on the money laundering aspect as well as the aspect of currency being used to finance terrorism.” But it will happen.”
The minister had previously expressed doubts about the size of the cryptocurrency market. “We’re not sure of the veracity of the data, which says that the volume is that much or that much. Those numbers are dubious.”
Meanwhile, bitcoin dropped nearly 2.7 percent on Monday and was trading at $33,531. The world’s largest cryptocurrency by market cap has fallen over 50 per cent since its peak in November last year.