The Indian Ministry of Finance has called for the adoption of Bitcoin (BTC) tax laws in the country. According to the Times of India, recently the Central Economic Intelligence Bureau of CEIB submitted a draft paper proposing to impose an 18% goods and services tax on Bitcoin trading.
CEIB figures estimate the estimated Bitcoin transaction volume in India to be over $ 5.4 billion. So, with the proposed tax of 18%, the government could make about $ 970 million in crypto tax.
As part of the proposed plan, the CEIB is pushing for virtual currencies to be classified as “intangible assets” in order to fall under the jurisdiction of GST with taxes levied on the profits made from trading.
Commenting on the news, Tanvi Ratna, CEO of Indian crypto policy consulting firm Policy 4.0, tweeted:
Unfortunately, this does not necessarily mean that crypto will be legal. Under Indian law, illegal income is also taxable and tax evasion is considered a criminal activity. “
In 2011, the Indian Ministry of Finance even clarified that tax evasion from illegal sources of income was a criminal offense. At the time, the government was reportedly reclassifying all forms of tax evasion as criminal offenses.
Except the Supreme Court undo the Reserve Bank of India’s ban Not much has happened against banks operating crypto exchanges in March through cryptocurrency regulations in the country.
The lack of clarity on the regulations has been reported preventing greater investor involvement in the sector. The crypto peer to peer trading market in India continued to grow in 2020.