India Plans to Tax Revenue From Bitcoin Investments: Report
Investors based in India may soon be required to pay taxes on the income from Bitcoin investments.
According to The Economic Times (ET), a business-focused daily, the country's income tax authority is tracking investors making money amid the ongoing Bitcoin price recovery and is expected to collect taxes.
The tax authority gathered information on Bitcoin trades conducted through banking channels before the Reserve Bank of India's crypto ban went into effect in April 2018. The Supreme Court lifted the ban in early March, bringing joy exchanges to both investors and the local cryptocurrency.
"The tax authority can also monitor the profits of cryptocurrency investors registered through KYC / AML-compliant exchanges such as CoinDCX and through national identification documents such as the PAN card," said Sumit Gupta, CEO of Mumbai-based cryptocurrency exchange CoinDCX. said CoinDesk.
Some experts anticipate a 30% tax on cryptocurrency profits, and many advise their clients to submit Bitcoin returns as capital gains that are linked to stocks, according to the article.
Amit Maheshwari, a partner at tax and advisory firm AMK Global, told the newspaper that actively trading Bitcoin would be treated as a speculative business and would attract normal tax rates. In contrast, authorities can treat one-off or infrequent transactions as long-term or short-term capital gains, depending on the holding period, and charge a reduced rate of capital gains.
The tax authorities have not yet assigned returns from cryptocurrencies to a specific category. "When an investor is currently filing their income tax return, the amount of income from investing in cryptocurrencies is highlighted under" Income from other sources, "Gupta told CoinDesk.
The clarity about taxes and regulations can lead to greater investor participation. While the Indian government does not consider Bitcoin legal tender, holding cryptocurrencies is not necessarily illegal or prohibited.
As early as September, the government reportedly considered a new law banning trading in cryptocurrencies. However, according to one think tank, the government would be better off legitimizing Bitcoin by regulating it like corporate stocks.