Although India has not released a clear cut guideline that will regulate crypto and its other uses, the intelligence agency in the country has proposed new regulation. According to the new regulation, traders, investors, and other users who wish to use Bitcoin to carry out transactions for goods and services would need to pay a tax of up to 18%.
In the statement that the country released, they were hoping to generate revenue that will run into $1 billion for the economy simply because Indians use Bitcoin and other assets to carry out transactions worth $5 billion every year.
The new crypto tax rule was proposed by the CEIB
According to recent reports, the party that proposed the tax filing, the Central Economic Intelligence Bureau (CEIB), has already finalized and sent a sealed copy of the proposal to the Board of Indirect Taxes and Customs. According to the CEIB, they had already run Bitcoin through so many scenarios while conducting their background checks. They discovered that the asset could best be described as an “intangible asset.”
If the proposed regulation is finally accepted, it means that the country would be able to levy the said amount of taxes on the usage of Bitcoin to pay for goods bought and services rendered across India. The intelligence body also said that if the lawfully comes into place, then the country will be ready to say goodbye to illicit activities that are always carried out using the leading digital asset.
Also read:In their report, the CEIB said they researched and found out that Indians carry out nothing less than Rs. 40,000 crores Bitcoin transactions across the country on an annual basis. If the tax law is passed, then it means that India would pocket nothing less than Rs. 7,200 crores from transactions made using Bitcoin.
India witnessing massive crypto trade volumes after Supreme Court rule
However, this is the second time in as many days that India would be trying its hands on a crypto law to check those in the crypto sector across the country. According to previous reports, the Indian government indicated that it would start charging a 30% tax on all profits accrued from trading and investing in Bitcoin. Regulating crypto has not come from an easy place because India was formerly opposing the technology.
In 2018, a memo released by the premier bank in the company, the Reserve Bank of India, said that all financial institutions were banned from working with any company involved in digital assets. Even though the rule was not an outright ban on trading digital assets across the country, most crypto-related businesses moved their operations outside the country.
It was not until this year that the Supreme Court of India was petitioned, and it lifted the ban while branding the rule by the RBI as “Unconstitutional.” After the ruling, the country started witnessing a massive daily transaction volume carried out using crypto and more crypto-related companies coming into the country.
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