Budget 2022: How will the government tax crypto-related income?
The Indian crypto community is keenly awaiting tax measures on crypto-related income in Budget 2022 which is set to unveil on February 1. Per reports, the government is looking out for advice from various taxation experts on this matter.
While the much-awaited cryptocurrency bill, which was to be presented in Parliament during winter session in 2021, has been delayed, the Centre is seeking to define taxation of incomes earned by trading or investing in cryptocurrencies.
Reportedly, the Centre is mulling whether income from crypto-related activities can be treated as business income or capital gains. The bill treats cryptocurrencies as a commodity and proposes to segregate virtual currencies on a use-case basis.
Per ET, there could be a substantial increase in tax burden on cryptocurrency investors, with an income tax slab of anywhere between 35 and 42 percent on crypto assets.
Also, previous reports noted that the government is planning to implement 1 percent GST on cryptocurrency exchanges, which will be collected at source, and aiming to hand the regulatory onus of this space to SEBI.
Given that cryptocurrency-related transactions may be taxed in the highest income bracket by the Centre, the government could slap 18% GST on crypto trade, reported ET.
A possible classification of cryptocurrency exchanges could involve three categories: facilitators; brokerages, which connect buyers and sellers; and trading platforms, majorly electronic in nature, providing market monitoring and trading software infrastructure to participants.
According to media portals, the Indian cryptocurrency policies will firm up more decisively after the government observes the rules being set out by the US.
Under the ambit of taxation will also come
Read more on moneycontrol.com
