TL;DR Breakdown
- India may begin to tax crypto gains, i.e, profit from crypto trading.
- The Indian government has a controversial stance on crypto industry.
- 18 percent tax would be imposed on foreign crypto exchange firms in India
Authorities in India have begun working on how they will tax crypto gains, i.e., profits made from cryptocurrency trading.
This is as the Indian government continues to blow hot and cold regarding crypto and crypto operations in the country. Local reports in India claim that rather than an outright ban on cryptocurrencies, authorities plan to implement the crypto gains tax.
Economic Times quoted sources close to the matter as saying that the government is contemplating taking a different approach to the digital asset space.
They noted that the plans to tax crypto gain are coming from the local tax department in India. The source noted that India taxing crypto gains does not mean that the country would accept cryptocurrencies as a valid asset class.
It is understood that the belief from the government is that every activity generating any income for locals should be taxed.
Arguably, the Asian country has the most controversial views on the digital asset industry.
Crypto gains tax: India’s back and forth on crypto
Back in 2018, India’s apex bank, The Reserve Bank of India (RBI), forbade all customers from operating with anyone even remotely associated with the crypto industry.
It took the intervention of the Supreme Court to reverse the decision early in 2020. The RBI, however,
continued its stance against digital asset usage, even though some reports suggested that locals are quite fond of BTC and other cryptocurrencies.
From its body language, it is safe to say the Reserve Bank of India prefers to have more control over what currencies the public uses.
RBI Governor Shaktikanta Das confirmed recently that the apex bank would launch trials for a central bank digital currency by the end of the year.
Also, the government would impose an 18 percent tax on any foreign cryptocurrency exchanges operating in the large local market.
