The Indian Central Bureau of Economic Intelligence (CEIB) is proposing an 18% tax on Bitcoin transactions in the country.
Did you like the content? Share it
Click to share on Twitter (opens in a new window)Click to share on Facebook (opens in a new window)Click to share on LinkedIn (opens in a new window)Click to share on WhatsApp (opens in a new window)Click to share on Telegram (opens in a new window)Click to share on Skype (opens in a new window)
India’s Central Economic Intelligence Bureau (CEIB) recently submitted a proposal to the country’s government to impose an 18% tax on Bitcoin trade (BTC).
Bitcoin surpassed USD 28,000 over the Christmas weekend
An 18% tax!
According to a report published by The Times of India, the government is currently evaluating a proposal to impose an 18% goods and services tax (GST) on Bitcoin transactions.
The proposal suggests that Bitcoin would be considered a current asset and would charge GST on margins earned on trade.
In addition, the report noted that CEIB requested the Government of India to recognize Bitcoin as an intangible asset.
Trade in crypto currencies could be penalised in India
How important is Bitcoin in India?
We must bear in mind that India is the third largest economy in Asia and currently one of the fastest growing economies. However, the country’s relationship with cryptosystems, especially Bitcoin, is a bit complicated because of regulatory uncertainty.
In fact, India’s Supreme Court lifted a two-year ban imposed by the RBI on banks and financial institutions in order to deal with cryptomonies. Also, at least for the time being, there is no regulator for the crypto industry.
But despite the regulatory problems, the crypto community in India has managed to consolidate. In fact, according to The Times of India, the number of total transactions in the country is equivalent to 40 billion rupees, or approximately USD 5.5 billion.
Therefore, if the proposal is approved, the tax would yield 7.2 billion rupees. This would translate into US$1 billion in tax revenue each year from Bitcoin trading in the country.
This clearly highlights the importance of Bitcoin in India. It is also worth mentioning that recently CoinDCX, an Indian-based crypto exchange, has been expanding very aggressively.
In fact, on December 21, CoinDCX raised USD 13.9 billion from investors such as Coinbase and Polychain.
In addition, according to Livemint, retail investors between the ages of 25 and 40 are spending millions on the crypto-currency trade in India every day.
It is therefore clear that the country’s regulators have become aware of the amount of money flowing into the crypto market. But how will the tax impact on the crypto community of Bitcoin in India? We want to know your opinion!