Centre mulls tweaking law in Budget to tax cryptocurrency gains
In the upcoming Budget, the government is exploring revisions to the Income Tax Act to bring income from cryptocurrency trades within the tax net. It is also considering levying a goods and services tax (GST) on virtual currency transactions.
People are already paying capital gains on cryptocurrency income, and the GST law allows such transactions to be taxed as’services,’ according to Revenue Secretary Tarun Bajaj.
Cryptocurrency investments have soared recently, fueled by promises of better profits. These currencies have also acquired popularity among young people.
Taxing such “intangible” assets, according to the tax administration, will not make trading in them legitimate. “We’ll pick up the phone.” People are already paying taxes on it, as far as I’m aware. We’ll see if we can actually bring in some modifications to the law position now that it has expanded so much. However, that would be a budget-related task. “We’re getting close to the Budget; we have to think about it,” Bajaj remarked.
The Department of Revenue is also looking into whether bitcoin exchanges may be classified as e-commerce platforms and be subject to a 1% tax paid at source (TCS).”If we come up with a new law, then we will see what is to be done,” Bajaj told PTI in response to a question about if TCS provisions might be included for crypto trading. “However, if you earn money, you must pay taxes… We’ve already paid a few taxes. “Some people have treated it as an asset and paid capital gains tax on it,” he continued.
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