Almost a year that India hesitates on the taxation of cryptocurrency transactions. Indeed, the State has long wanted to tax them, but it must first assess their “taxability”. As part of this, national tax authorities require major platforms to provide information on the tokens that trade on their exchanges.
According to a senior executive, the Central Board of Indirect Taxes and Customs (CBIC) Indian is working on this issue with the aim of determining whether the Goods and Services Tax, commonly known as “GST” can be applied to cryptocurrencies. And in this context, the platforms have until the end of November to respond to questions from this tax administration.
“We have had meetings with crypto exchanges on high-profile issues regarding the asset class. We asked for a detailed report on the different crypto products traded, their respective transaction fees and how they are calculated. »
Senior Indian leader.
Tax authorities assess the taxability of transactions
As mentioned, the request of information aims to assess the taxability of cryptocurrency transactions. In particular to see how to apply the GST and at what rate. It should be noted that local Indian platforms are already subject to a tax in the total amount of 18% levied on the services they provide.
In fact, as early as last April the Indian government affirmed in the press its desire to tax this digital economy. In this context, a second tax was introduced in July in the form of a withholding tax (TDS) of 1% on transactions.
In addition to determining the taxability of cryptocurrency transactions, the CBIC is also considering a legal definition and classification of these. A question that should be addressed during the G20 meeting to be held on November 15 and 16 in Bali. Because it seems important to remember that India is at the G20 presidency since December 1, 2021. And as such, it therefore has a predominant role to play during this 17th summit which will begin in two weeks.
Above all, we already know that the Indian government intends to comply with the standards set by the Financial Action Task Force (FATF). And if India changes its legislation, more than 100 million cryptocurrency users will be directly affected. Because this country is currently the one with the most in the world.
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