At first, India did not want any business with cryptocurrencies, but now, the country is seeking to tax crypto gains as trading activities soar.
According to a report today, tax authorities are already in possession of investors’ details who purchased the asset via banking channels and are currently weighing the possibility of collecting tax for revenues generated while trading the cryptocurrency.
Sources familiar with the matter told local media that the country’s tax authorities are still sourcing for investors’ information across exchanges.
Different Opinions Surround The Development
The move has caused a division among financial experts in the country. One camp believes that the government does not have the right to tax crypto gains under current regulatory conditions, while others do not share the same sentiment.
Rakesh Nangia, the director of Centennial Group, said that India cannot tax crypto gains because it is yet to regulate the industry, which would have helped bring the asset class under tax authorities’ supervision.
Nangia added that whenever the country provides precise regulation for the industry, there would not be any issue implementing it.
On the other hand, some experts believe the country has the right to tax BTC gains as it deems fit.
They suggest that in doing this, tax authorities can classify crypto gains under business income, which may give regulators the right to collect up to 30% tax from each investor.
Interestingly, some experts are giving investors free tax tips on how to prevent their crypto gains from being taxed whenever the move becomes official.
These experts urge Bitcoin investors to declare their crypto profits as capital gains. By so doing, tax regulators would think the profit came from investing in shares and stocks instead of cryptocurrencies.
India Embattled Crypto Space
Recall that the Reserve Bank of India (RBI) instructed crypto exchanges to halt operations or relocate their operations out of the country back in 2018.
Not satisfied with the bank’s declaration, exchanges approached the country’s judiciary, and India’s Supreme Court ruled in favor of the trading platforms and allowed crypto trading in the country.
Since then, trading platforms have requested that India should provide regulatory clarity for the industry to prevent any future misunderstanding.
