• In India, both income tax and GST may be levied on cryptocurrency

  • According to a local report, the Indian government is planning to levy both direct and indirect taxes on crypto assets. According to a media outlet source,

    “One of the most important issues is taxation.” If there is a gain or income from cryptocurrency, it should be taxed according to capital gains rules. Similarly, if there is a service component to the transaction, GST must be levied.”

    In India, tax advice is available.

    The announcement comes ahead of Parliament’s upcoming Winter Session, during which a comprehensive crypto bill is expected to be introduced. The draft is expected to include guidance on crypto income tax and Goods and Services Tax (GST).

    The November session is considered critical for the country because India has recently softened its stance on the issue. While reports claim that India will not grant crypto legal tender status, the asset class is also unlikely to be banned. This is also in light of the fact that, according to industry estimates, the South Asian country has around 20 million cryptocurrency users.

    While regulatory clarity will be provided after the bill is debated, cryptocurrencies can be taxed based on individual tax slabs, with applicable surcharges and cess. Crypto platforms, on the other hand, may be subject to an 18% GST.

    Furthermore, according to an Indian media report,

    “The Indian government intends to categorize virtual currencies and their tax treatment based on their intended use — payments, investment, or utility.”

    More global rules and regulations

    While India appears to be preparing to designate crypto as an investment class for tax purposes, other countries are also working on such regulations. Take Japan, for example. It recognizes digital assets as legal property and plans to implement “strict” taxation. Whereas the highest tax bracket will tax cryptocurrency gains at a rate of 45 percent.

    Meanwhile, in the United States, Congress passed an infrastructure bill last week that includes tax reporting requirements for cryptocurrency investors.

    According to Coin Center’s Jerry Brito, the provisions of the $1 trillion bill will go into effect after January 1, 2024. Meanwhile, the industry is expressing its displeasure with the broad definition of “brokers” and a statute requiring personal reporting.

    It is also worth noting that cryptocurrencies are subject to wealth taxation in Switzerland. In the meantime, other countries can be labeled as crypto havens. El Salvador, for example, has exempted cryptocurrency gains from taxation.

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