Government may change the law to levy tax on earnings from cryptocurrencies, rules may be included in the budget next year

 

New Delhi, PTI.  The government is considering amending the income tax laws to bring income from investments in cryptocurrencies under the tax net. Some laws related to this can also be included in the next year's budget. This information has been confirmed by quoting a top official. Revenue Secretary Tarun Bajaj said, “In terms of income tax, some people are already paying capital gains tax on income from cryptocurrencies, and with respect to Goods and Services Tax (GST), the law is very clear that This rate will be applicable in case of other services.”

In a statement, Bajaj said, “I understand that people are already paying taxes on this. Now that it has really increased a lot, we will see if we can actually bring about some change in the state of the law. But this will be done under budget activity only. TCS (Tax Collected at Source) provision can also be expected to be introduced for crypto trading. If you earn money then you have to pay tax, we have already got some taxes. Some have treated it as an asset and have paid capital gains tax on it.”

On whether those involved in cryptocurrency trading should be classified as facilitators, brokerages and trading platforms and taxed under GST, Bajaj said, “Such things will already be available in other services as well. Hence whatever GST rate is levied on them will be applicable. The GST laws are very clear, if there is a broker who is helping people and charging brokerage fee, then GST will be charged.”

The government is likely to introduce a bill on cryptocurrencies during the winter session of Parliament that begins on November 29. Such currency is allegedly being used to lure investors with misleading claims. In recent times, there has been an increasing number of advertisements featuring movie stars, promising easy and high returns on investment in cryptocurrencies. There is currently no regulation or any restriction on the use of cryptocurrencies. Prime Minister Narendra Modi, in a meeting on cryptocurrencies with senior officials last week, indicated that stronger regulatory measures could be taken to deal with the issue.

RBI, while reiterating its views against cryptocurrencies, said that cryptocurrencies pose a serious threat to the macroeconomic and financial stability of the country and the number of investors trading on them as well as their claimed market value doubt too.