TL;DR Breakdown
- India is looking into taxing Bitcoin users by 18%.
- India will put Bitcoin down as an intangible asset.
- The country likely needs money to cope with covid 19 expenses.
Why India wants to tax Bitcoin
India is considering taxing all its Bitcoin users by 18%. The country can tax the investment coin by deeming it an intangible asset.
India’s intelligence agency has suggested that Bitcoin will receive an 18% tax on goods and services for all transactions. The decision is not final yet as the Government is not sure what the best approach is.
The Times of India Coverage reported that the Central Economic Intelligence Bureau (CEIB) sent the proposal to the Central Board of Indirect Taxes and Customs (CBIC).
The majority of the credit for this proposal belongs to the CEIB who had released a report looking into different purposes of Bitcoin and how the coin could fall under intangible assets. The plan is also to minimize the use of BTC for illegal activities.
India considered taxing the coin in early December when it looked into a 30% tax.
India and Bitcoin use
India initially banned crypto usage in 2018 when the Reserve Bank of India prohibited any financial organizations that work with the bank from partnering with cryptocurrency businesses. At the beginning of this year, India lifted its ban and saw a surge in crypto usage.
The Government is merely looking for a way to benefit from almost six billion dollars generated in BTC transactions. Opting to tax Bitcoin could result in the country gaining one billion dollars from taxes.
Issues in India
It is no surprise that India is looking for ways to generate more money amid the pandemic. Many are losing their lives and jobs, and thus, this is affecting the economy.
India is also reported by Aljazeera to have the new Covid variant, meaning that the end of Covid is in the far distance. According to the BBC, India will not have access to the covid vaccination until January, putting it far behind countries like the UK that have already rolled out vaccines.
Covid cases will likely grow by then, and they will soon run out of what they have. India has a population of just over one billion, which means it has many people to safeguard. India has over 10 million covid cases.
Bitcoin
India is not a fool to want to tax Bitcoin. Many people, even from wall street, are profiting significantly from BTC. Some investors are gaining as much as one million dollars from Bitcoin investment.
Bitcoin is performing well consistently and has climbed from its price of 0 when it was launched 12 years ago to $26,826 at the time of writing (14:31 GMT). Given how quickly investors hopped onto BTC as soon as India’s ban was lifted, it is clear that there is an eagerness for BTC in India.
Ofcourse many Indian citizens would be interested in the digital coin as India is a tech-savvy place. India is desperate for more funds, like many countries, are due to the dire pandemic conditions.
Taxing Bitcoin could help the country cope with additional vaccination costs.
