Wednesday, September 29

Bitcoin trading likely to attract Income Tax, 18% GST: Reports

Bitcoin trading likely to attract Income Tax, 18% GST: Reports
Bitcoin buying and selling most probably to draw Income Tax, 18% GST: Reports

The government is considering imposing income tax (IT) and Goods and Services Tax (GST) at the rate of 18 percent on the profits and trade of bitcoin or related cryptocurrencies, a Business Standard report said.

Forward of the presentation of Cryptocurrency and Regulation of Official Digital Forex Invoice, 2021 within the Finances session of Parliament, as has been reported by some media publications, the report additional added that each the taxes might be levied for the present fiscal year.

Last year, there was a report by the Times of India, telling officials said that the Central Economic Intelligence Bureau (CEIB), an arm of the finance ministry had suggested that bitcoins can be categorized under the ‘intangible assets’ class, thus making it liable for GST levy.

However, the Ministry of Finance had stated on February 9 on Virtual ‘Currencies’ stating that they are like Ponzi Schemes.

The Finance Ministry in its statement said that VCs are not backed by Government fiat. These are also not legal tender. Hence, VCs are not currencies. These are also being described as ‘Coins’. There is however no physical attribute to these coins.

Therefore, Virtual ‘Currencies’ (VCs) are neither currencies nor coins. The Government or Reserve Bank of India has not authorized any VCs as a medium of exchange.

Further, the Government or any other regulator in India has not given license to any agency for working as an exchange or any other kind of intermediary for any VC.

Persons dealing in them must consider these facts and beware of the risks involved in dealing in VCs.

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