New Delhi: As the PM Modi Meetings on cryptocurrency ends. A piece of major news in the market has erupted saying, Govt. of India is probably heading to tax-ate Cryptocurrency. According to media reports, The Union Finance Ministry is leading these discussions, and the question of bringing the currency into direct and indirect taxes are among the issues under active discussion by teams.
The Govt. of India has already raised concern over the malicious use of cryptocurrencies and so the govt. is seeking ways to regulate it. As of the reports, The holders and traders of digital currencies will get imposed by short-term and long-term capital gains tax, officials at RBI have confirmed discussions on the point. Whereas, for the service providers in the cryptocurrency ecosystem, GST at the rate of 18 percent is in line with the rate for most services in the financial sector.
According to the Tax experts, cryptocurrencies are likely to be defined as an asset and not as a currency or medium of exchange, the main route to tax them would be through direct tax.
In 2018, The RBI banned Indian exchanges and traders to get indulged in CryptoCurrency trading and asked them to avoid it. However, Supreme Court deferred the order and allowed traders. Since then, RBI and Govt. been seeking ways t regulate cryptocurrencies and put Taxation on them.