New Delhi: Government is considering raising income tax (IT) and goods and services tax (GST) at an 18 percent rate on earnings and trading of bitcoins or related cryptocurrencies, says a report in Business Standard.
Prior to the introduction of the cryptocurrency Bill and the Regulation of the Official Digital Currency Bill, 2021 at the Senate Budget session, as reported by several media publications, the report further added that both taxes will be levied for the current fiscal year.
Last year, a report in the Times of India, quoting officials said that the Central Economic Intelligence Office (CEIB), a branch of the finance ministry, had suggested that bitcoins can be categorized under a class of ‘intangible assets’, making it liable for GST levy.
Meanwhile, the Ministry of Finance had issued a statement on February 9 on Virtual ‘Currency’ stating they were Ponzi Schemes.
The Ministry of Finance said in its statement that Government fCs do not support VCs. Nor are these legal tender. Therefore, VCs are not a currency. These are also described as ‘Coins’. However, these coins have no physical attribute. Therefore, Virtual ‘Cash’ is not money or coins. Neither the Government nor the Reserve Bank of India has authorized any VCs as a medium of exchange. Furthermore, neither the Government nor any other regulator in India has granted a license to any agency for working as an exchange or any other type of intermediary for any VC. People dealing in them need to consider these facts and be wary of the risks associated with dealing in VCs.