Cryptocurrency tax: Govt mulling changes to income tax laws as part of Budget next year

 







The government is planning to bring changes to the income tax laws to bring cryptocurrencies under its ambit in the upcoming budget next year.

Revenue Secretary Tarun Bajaj said some people are already paying capitals gains tax on income from cryptocurrencies and in respect of Goods & Services Tax too the law is very clear that the rate would be applicable in case of other services too, according to PTI.

"We will take a call. I understand that already people are paying taxes on it. Now that it has really grown a lot, we will see whether we can actually bring in some changes in law position or not. But that would be a Budget activity. We are already nearing the Budget, we have to look at that point of time," Bajaj told PTI in an interview.

Bajaj also said in case a new law is brought then we will saw what will be done, when asked if provisions of Tax Collected at Source (TCS) could be introduced for crypto trading.

"But yes, if you make money you have to pay taxes... We have already got some taxes, some have treated it as an asset and paid capital gains tax on it," he told PTI.

When asked whether people involved in cryptocurrency trading would be categorised as facilitator, brokerage and trading platform and how taxation would be done under GST, Bajaj said, "there would already be such things available in other services also. So whatever GST rate they are taxed at, that will be applicable on them."

"They have to get themselves registered. The GST law is very clear. If there is an activity, if there is a broker who is helping people and charging brokerage fee, GST would get charged," he said.

The government is likely to introduce on cryptocurrencies during the Winter Session of the Parliament which starts on November 29 over concerns over misleading advertisements and claims. Cryptocurrency advertisements promising high returns to investors have flooded television and internet off late. The space is unregulated currently.

PM Narendra Modi held a meeting held a meeting with with several officials on cryptocurrencies leading to speculation that the industry could face strong regulatory measures.

Earlier this week, Standing Committee on Finance which is chaired by BJP member Jayant Sinha met the officials of cryptocurrency exchanges, blockchain and Crypto Assets Council (BACC) among others and it was decided that digital tokens will not be banned but should be regulated.

The RBI Governor Shaktikanta Das has voiced his strong disagreement with cryptocurrency trading, dubbing it a threat to financial stability of the country since they are unregulated.


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