• The Income Tax Department of India may soon target cryptocurrency trades and ecosystems

  • Indian entrepreneurs believe that crypto tax laws are essential for government acceptance of cryptocurrency.

    Experts believe investors should be at ease as the Income Tax Department of India reportedly considers taxing crypto traders and crypto exchanges soon.

    According to ET Now, the tax department, which is part of India’s Ministry of Finance, has expressed interest in taxing crypto earnings from trade and exchanges. According to the sources, the move does not entitle cryptocurrencies to a valid asset class position.

    In an interview with ULTCOIN365, Indian entrepreneur Nischal Shetty, CEO of WazirX crypto exchange, stated that obtaining clarity on crypto-related Goods and Services Tax (GST) will aid in identifying the asset class of cryptocurrencies:

    “It goes without saying that your crypto earnings are taxable in the same way as other income and must be reported on your tax returns. It is unclear whether the GST would be applied to the amount of cryptocurrency purchased or the transaction fees paid by the user as of now.”

    According to the initial report, the Indian government believes that all activities that generate income in cryptocurrencies must be taxed. However, the cabinet’s soon-to-be-released legislative proposal will provide more clarity on this decision.

    On September 9, Reserve Bank of India Governor Shaktikanta Das expressed similar concerns about cryptocurrencies such as Bitcoin (BTC): “We have conveyed to the government our serious and major concerns about cryptocurrencies from the standpoint of financial stability.”

    In response to the possibility of a pending legislative bill on crypto taxation, Indian investor Evan Luthra of Luthra Group told ULTCOIN365 that taxing digital currencies is “a good thing.”

    “I don’t believe there is anything to be concerned about for investors or potential investors. Governments that recognize the true potential of cryptocurrencies and implement policies to support innovation will be the future leaders.”

    On January 25, the Reserve Bank of India (RBI) released a booklet that explores the use cases for a digital version of fiat currency.

    While the government sees only two viable options for cryptocurrency, adoption or total ban, the RBI intends to implement its own version of CBDC if “there is a need.”

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