The Government of India is putting together the answers to Frequently Asked Questions (FAQ) related to taxation matters of digital currency and assets to bring clarity to the confused investors of the Crypto field.
The mania around Cryptocurrencies like Bitcoin, Ether etc. has not only confounded the governments all over the world, but common public as well as the investors are also equally puzzled by uncertainty about what in reality, these Cryptocurrencies are actually are, what are rules and laws governing them and what is its future etc.
Some governments like India, in the meantime, announced certain rules regarding imposition of taxes on transactions related to Cryptocurrencies or Crypto assets. That themselves led to further confusion among the public as to how these taxes are to be calculated, on whom it will be imposed, whether on Crypto Exchanges or the investors? The people were demanding answers from the government.
India Coming Out With FAQs Regarding Cryptocurrencies
So now, the Department of Economic Affairs (DEA), Revenue Department and the Reserve Bank of India are coming up with a comprehensive set of FAQ to solve all the queries of Crypto tax payers as well as tax collectors, as per a news report. This set of Frequently Asked Questions (FAQ), would also be screened by the law ministry, as per the report.
“FAQ on taxation of cryptocurrency and virtual digital assets is in works. Although FAQs are for information purposes and do not have legal sanctity, law ministry’s opinion is being sought to ensure that there is no loophole,” the official told PTI.
Indian Govt. Announced 30% Tax On Crypto Gains
An income tax at the rate of 30 percent is applicable on all gains from crypto assets from April 1, 2022 as per the budget for this financial year. Along with this, TDS at the rate of 1 percent will also be levied on all Crypto transactions exceeding Rs. 10,000 from July 1, 2022 with an upper limit of 50,000 a year for specified persons, which include individuals and HUFs.
The FAQ will hopefully also provide more transparency to the GST as the investors still don’t know whether cryptocurrency is defined under the category of goods or a service. Presently only exchanges are paying GST under the category of financial services at 18 percent.
Crypto Exchanges Faced Penalties
In a recent episode, major crypto exchanges of India were taxed and penalized to the tune of Rs. 95.86 crores on account of tax evasion. However, the Exchanges paid all the tax and the penalty remarking that they had no intentions as such, to evade tax but it was due to some kind of ambiguity related to taxation rule. However, the Exchanges paid all the tax and the penalty remarking that they had no intentions as such, to evade tax but it was due to some kind of ambiguity related to taxation rule.
Govt. In The Process of Framing Laws Regarding Cryptocurrencies
The government in India is also in the process of framing comprehensive laws and rules with regard to cryptocurrencies and crypto assets to remove any kind of ambiguities and uncertainties.
Recently during debates in Parliament, most of the legislators were in favor of regulating the cryptocurrencies. Some parliamentarians were also of the view that the Blockchain technology underlying the Cryptocurrencies should be made use of instead of banning it out rightly.
, Revenue Department and the Reserve Bank of India are coming up with a comprehensive set of FAQ to solve all the queries of Crypto tax payers as well as tax collectors.){kind=link}