The Indian crypto community may face new tax provisions as an additional burden, according to media reports.
India is a tech adaptive country. In the past few years, India showed a huge inclination toward innovation and revolution in the tech industry. This year, the Indian Central Bank, RBI, secured regulatory approval to use blockchain technology in the creation of Central Bank Digital Currency (CBDCs). In the present time, there is a 30% tax on the income generated on every crypto transaction.
On 9 May, CNBC TV18 published a report on behalf of a source and reported that India’s Goods and Services Tax (GST) Council is working to introduce GST on the crypto transactions, which will impose a 28% maximum tax.
“The proposal is to levy 28 percent GST on services and all activities related to cryptocurrencies soon,” source said to CNBC
Report noted that if this will get introduced then investors will be required to pay 28% highest tax on crypto transactions on crypto exchange, besides tax on revenue. So overall this results in a big burden on the crypto investors.
CNBC also noted that 28% tax on crypto transactions may be part of the consideration of cryptocurrencies under the category of gambling activities.
Misconception and misunderstanding In India
It is a big reality that cryptocurrencies & blockchain technology are still a big mystery among Indian news Media. In the past, it has been seen many times that news media reports reported about cryptocurrencies in the wrong way with wrong information, even though they don’t have understanding on any private crypto assets or public crypto assets.
On behalf of such types of mistakes by Indian news media reporting on crypto. Experts claimed that GST’ 28% and 30% revenue tax is totally a big misunderstanding because under this situation no one will be able to transfer his Crypto assets, and also no one will try to sell his holdings. And also such things will result in the use of cryptocurrencies via custodial wallets, so the majority of the people will access cryptocurrencies outside the laws.
Experts noted that, if GST will get introduced in the crypto industry then a 30% tax system will be removed and a 28% tax will be applicable on investors’ profit.