From Crypto Tax Proposal Turning Into Law Soon To GST Levy: Big Announcements Around Cryptocurrency In India

With the crypto future getting cloudier day by day in India, existing and prospective crypto investors have been waiting for some positive news for a long time.

But the recent happenings seem to further firm the government¡¯s stance against cryptocurrency.

Let¡¯s have a look at what all¡¯s happening around crypto in the Indian Finance Ministry.

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Also Read: Income Tax Department To Issue Notices To 700 Crypto Investors, Could Levy Penalty, 30% Tax & Interest

1. Proposal For Crypto Tax Policy Likely To Be Considered In Parliament Today

After Budget 2022's announcements, Finance Minister Nirmala Sitharaman is taking the next step to turn the crypto tax proposal into law. A 30% tax proposal on crypto may be closer to becoming law as India's lower house of Parliament is scheduled to consider the legislation today. Sitharaman is also set to introduce the Finance Bill, 2022 in Lok Sabha today.

2. Govt Working on Classification Of Crypto Under GST

Another vital happening around crypto is that the government is working on the classification of cryptocurrency as goods or services under the GST law so that tax can be levied on the entire value of transactions.

As per PTI, GST officers are of the view that cryptos, by nature, are similar to lottery, casinos, betting, gambling, horse racing, which have 28% of GST on the entire value. Besides, GST at 3% is levied on the entire transaction value in the case of gold.

Another official said that if the GST is levied on the entire transaction of cryptocurrencies then the rate could be in the range of 0.1%-1%.

Also Read: RBI Governor Drops More Bombshells On Crypto After 30% Tax, Says Its 'Not Even A Tulip'

3. Govt Clarifies That Losses Cannot Be Set Off Between Trades Of Different Tokens

In a major setback for crypto investors and trading platforms, an official from Finance Ministry reportedly said this week in Parliament that losses incurred from one kind of virtual digital assets (VDAs) cannot be set off against the gains from any transaction involving another VDA while computing tax.

The clarification implies that investors will have to not only pay the 30% tax for every gain they make, but even the losses are not deductible from the final taxation amount if different tokens are traded.

4.¡°Govt Does Neither Collects Data On Bitcoin Transactions Nor Has A Proposal To Recognize It As Currency¡±

Finance Minister Nirmala Sitharaman, in a string of statements in the Parliament a few months back, had said that the government has no proposal to recognise Bitcoin as a currency in the country. She had also informed the House that the government does not collect data on Bitcoin transactions.

Also Read: Countries Where Cryptocurrency Is Taxed

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