The Indian government can collect direct and indirect taxes on crypto assets, according to the media source. Both capital gains tax and service tax may need to be applied to cryptocurrencies.
A source reported: “One of the key issues is taxation. If there is gain or income from crypto, it should be taxed per capital gains rules. Similarly, if there is service involved in the transaction, then GST needs to be levied.”
Beware of Income tax and GST while buying crypto in India
Crypto income tax and GST may apply to crypto earnings in India, as the Government prepares to introduce a comprehensive crypto bill in Parliament.
India may not grant a legal tender status to crypto, but it is unlikely that they will ban the asset class. This is especially considering that there are about 20 million users in India alone. The government will be making important decisions in the November session, including if investors have to pay taxes on their crypto.
Clear regulatory measures are expected to be set in motion after the bill is discussed. Crypto-currency traders will be taxed according to their tax slabs with limited surcharge, whereas crypto platforms can attract 18% GST.
As per an Indian media report: “The Indian government is planning to compartmentalize virtual currencies, and their tax treatment will be based on their use case.” For example, bitcoin fits into the category of payments and investing both.
Will these new regulations affect your crypto transactions?
In India, both Income tax and GST may apply to crypto. This follows the elimination of a distinction between cryptocurrencies and commodities in the goods and services tax Act.
Japan is one country looking to impose strict tax laws on cryptocurrencies. Its highest tax bracket will attract 45% in taxes on cryptocurrency gains, so it’s important for investors in India to pay attention. It is also noteworthy that cryptocurrencies in Switzerland are subject to wealth tax.
Meanwhile, other countries can be tagged as crypto heavens. For instance, El Salvador has exempted foreign investors from taxation on crypto gains.
