India’s road map in regulating cryptocurrency is gradually taking its shape. As per government sources, an all-encompassing bill on digital assets might be submitted for Cabinet approval before the Parliament session, beginning on November 29 this year. The much-anticipated bill would reportedly contain detailed aspects of crypto regulation, classification of these assets, and intent to tax earnings from them.
According to the sources, after the intent to tax earnings gets clearance, the provisions for implementation would be formally announced in the finance bill at the time of the Budget session, starting in January next year. Sources further said that India’s Finance Minister Nirmala Sitharaman’s budget might finally remove the regulatory ambiguity among the growing crypto enthusiasts in the country.
India working on the Crypo Tax framework
On the taxation aspect, a top government representative revealed that the authorities are currently working on framing legislation on the crypto assets. That being said, any profits or gains that arise from cryptocurrencies would be taxed in accordance with the rules of capital gains and might attract the regular Good and Services Tax [GST].
Reiterating similar sentiment, Revenue Secretary Tarun Bajaj recently stated,
We will take a call. I understand that people are already paying taxes on it. Now that it has really grown a lot, we will see whether we can actually bring in some changes in the law or not. But that would be a Budget activity. We are already nearing the Budget; we have to look into it at that point in time. if we come up with a new law, then we will see what is to be done. But yes, if you make money you have to pay taxes. We have already got some taxes. Some have treated it as an asset and paid capital gains tax on it.
Nevertheless, the latest developments with regards to regulating the cryptocurrencies and taxing the earnings from them are positive signs that the administration is adopting a more ‘balanced approach,’ unlike the Reserve Bank of India‘s [RBI] conservative stance. However, It needs to be seen whether the government’s position would follow the example of the moderate regulations in the European countries or be entirely unique in nature.