New Delhi: The cryptocurrency market has spread rapidly in India. Last year saw a huge jump in the number of people investing in cryptocurrencies. It is estimated that investment by Indians in cryptocurrencies is expected to increase to $241 million by 2030. But there is also a fear in the minds of people regarding this. There is no concrete law in India for cryptocurrencies.
A bill to regulate cryptocurrencies was expected to be introduced during the winter session of Parliament. However, it was not introduced. Now it is expected that the government can introduce this bill in the budget session. Significantly, the proposed cryptocurrency bill included provisions to treat cryptocurrencies as a commodity and treat virtual currencies differently based on their use. Along with the common taxpayers, businessmen and traders of the country, Indian crypto investors are also eagerly waiting for the Budget 2022. On February 1, Union Finance Minister Nirmala Sitharaman will present the budget in Parliament. In such a situation, some announcements are likely to be made in this budget regarding cryptocurrencies as well.
According to the reports in this regard, the central government is currently taking the advice of various tax experts regarding cryptocurrencies. In fact, the government now wants to clearly define the tax on income from investment or trading in cryptocurrencies. It is discussing whether income from cryptocurrencies can be treated as business income or capital gain.
Several reports had mentioned that the government is also planning to levy one per cent GST on cryptocurrency exchanges, which will be collected at source. Along with this, there is talk of handing over the regulation of the cryptocurrency industry to the market regulator SEBI. That is, SEBI will keep a close watch on crypto investors at all times and every transaction of cryptocurrency will be on the radar of Income Tax Department. However, what is the complete plan of the government will be revealed only during the presentation of the budget.
Both the sale and purchase of cryptocurrencies can be covered under reporting in the Financial Transaction Statement. Trading companies have already been referring to the sale and purchase of shares of mutual funds. The report said that the tax burden on cryptocurrency investors is expected to increase significantly under the announcement to be made in the budget. It said that the central government can keep the income tax slab on crypto assets between 35 percent and 42 percent. Along with this, the government is also considering imposing 18 percent GST on crypto trending.
first published:Jan. 15, 2022, 2:49 p.m.