The Indian government plans to impose two new tax laws with an aim to reduce digital currency transactions within the country this 2021. These laws will be imposed by April, according to the report released by the country’s finance ministry.
In addition to that, India’s finance minister Arun Jaitley says that these laws are needed in order to eliminate the use of cryptocurrencies in criminal activities.
‘The government does not recognize cryptocurrency as legal tender or coin and will take all measures to eliminate the use of these crypto-assets in financing illegitimate activities or as part of the payment system,’ Jaitley stated.
However, according to a report made by news channel CNBC-TV18, it is being debated in the ongoing parliamentary session on the national budget.
Despite the attempt of the financial sector to negotiate digital transactions, Indian authorities continue to move further with the ban of digital currency.
Moreover, local reports say that the taxes are expected to be imposed on exchange fees for digital currency transactions, which would be charged twice as high. Aside from that, the personal income tax will also be included if a trader profits through digital currency trades.
A higher official from the finance ministry of India said digital currencies will be taxed as monetary providers.
‘Bitcoins shall be classified as monetary providers bringing in 18% GST (Goods and Services Tax) on every payment fee that is collected within the trading platform. The same would be charged to the earnings one will get with the use of a digital currency transaction.’
Despite the new announcement involving the new tax laws, the future options for the digital foreign money sector in India remain uncertain, said an Indian authority who wished to remain anonymous.
‘Let’s be clear, just because tax or GST has been imposed on the transaction, it doesn’t mean that it will make the transaction legit or secured. Remember, taxability and legality of transactions depend upon the buyers and sellers.’
Depending on the income of the individual making a digital transaction, personal tax on their earnings could be as much as 30%.
Today, the country’s government is still unsure of how digital foreign money property could be outlined for tax functions.
According to local reports in India, these laws are currently being processed in hopes to include it in the current tax year, which ends in April.
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