The Union government plans to change income tax laws to bring cryptocurrencies under the tax net, with some changes that could be part of next year’s budget, the revenue secretary said. Tarun Bajaj at the news agency. PTI.
Bajaj said that in terms of income tax, some people already pay a capital gains tax on income from cryptocurrency, and with respect to the goods and services tax (GST), the law is also “very clear” that the rate would apply like those in case of other services.
âWe’ll take a call. I understand people are already paying taxes on it. Now that it’s really gone up a lot, we’ll see if we can actually make changes to the law’s position or not. But that would be a budget. are already approaching the budget, we have to look at that time, âBajaj told PTI in an interview.
When asked if a TCS (Tax Collected at Source) provision could be introduced for crypto trading, the secretary said “if we come up with a new law we will see what needs to be done.”
“But yes, if you make money you have to pay taxes … We already have taxes, some have treated it as an asset and paid capital gains tax on it”, did he declare.
When asked if those involved in cryptocurrency trading would be classified as a facilitator, brokerage and trading platform and how taxation would be carried out under the GST, Bajaj said that “of such things would already be available in other services as well. So whatever rate of GST they are taxed at, it will apply to them. “
“They have to register. The GST law is very clear. If there is an activity, if there is a broker who helps people and charges brokerage fees, the GST will be charged”, a- he declared.
Separately, the government is likely to introduce a cryptocurrency bill during the winter session of parliament that begins on November 29, when those currencies are said to be used to lure investors with misleading claims.
Notably, there have been a growing number of advertisements, even featuring movie stars, promising easy and high returns on cryptocurrency investments in recent times.
Currently, there is no regulation or ban on the use of cryptocurrencies in the country. Against this backdrop, Prime Minister Narendra Modi last week held a cryptocurrency meeting with senior officials and it looks like strong regulatory action could be taken to address the issue.
Earlier this week, the Parliamentary Standing Committee on Finance met with various stakeholders and experts, a first for the panel on cryptocurrency and related issues. The panel insisted on the regulation of cryptos but without completely closing the door on them.
Members of the parliamentary panel would have liked government officials to come before him and address their concerns. There was consensus that a regulatory mechanism should be put in place to regulate cryptocurrency. Industry associations and stakeholders were unclear as to who should be the regulator
MEPs have expressed concerns about the safety of investors’ money.
India has had a hot and cold relationship with digital currencies over the past few years. In 2018, it effectively banned crypto transactions after a series of frauds following Modi’s sudden decision to wipe out 80% of the country’s currencies, but the Supreme Court overturned the restriction 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 grew at a breakneck pace.
As a result, on February 5, 2021, the central bank instituted an internal panel to propose a central bank digital currency model.
An inter-ministerial panel on cryptocurrency chaired by the Secretary (Economic Affairs) recommended that all currencies, except those issued by the state, be banned.
The RBI has repeatedly reiterated its firm stance against cryptocurrencies, claiming that they pose serious threats to the country’s macroeconomic and financial stability and has also questioned the number of investors trading there as well as their market value. claimed.
One possibility that is being explored within the government is that cryptocurrencies may be banned for the use of transactions or for making payments, but that they may be held as assets like gold, coins and coins. stocks or bonds, according to various reports.
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