India’s income tax department may soon target crypto transactions and ecosystems

According to reports, as the Indian income tax department is considering imposing taxes on cryptocurrency traders and cryptocurrency exchanges soon, experts believe investors should rest assured.

According to ET Now reportThe taxation department under the Ministry of Finance of India has expressed interest in taxing cryptocurrency income through trade and exchanges. However, the source said that this move will not allow cryptocurrencies to gain effective asset class positions.

In an interview with Cointelegraph, CEO of WazirX Cryptocurrency Exchange and Indian entrepreneur Nischal Shetty stated that clarifying crypto-related goods and services tax (GST) will help identify the asset class of cryptocurrencies:

“There is no doubt that your crypto income is taxable like other income and should be declared in the income tax return. As of now, it is not clear whether the goods and services tax applies to the amount of cryptocurrency purchased or the transaction fees paid by users.”

Along these lines, preliminary reports indicate that the Indian government believes that all activities that generate revenue in cryptocurrencies must be taxed. However, the upcoming legislative proposal issued by the Cabinet will further clarify this decision.

On September 9, Shaktikanta Das, President of the Reserve Bank of India echo Concerns about cryptocurrencies such as Bitcoin (Bitcoin): “From a financial stability perspective, we have expressed to the government our serious and major concerns about cryptocurrency.”

Evan Luthra, an Indian investor in the Luthra Group, cited the possibility of a crypto tax legislation in the making, telling Cointelegraph that taxing digital currencies is “a good thing”.

“I think investors and potential investors have nothing to fear. Governments that realize the true potential of cryptocurrencies and introduce policies to support innovation will become the leaders of the future.”

related: Former Reserve Bank official pushes India to accept cryptocurrency

The Reserve Bank of India (RBI) shared a booklet on January 25th, discussing Use cases for the digital version of fiat currency.

Although the government believes that there are only two viable options for cryptocurrency, namely adoption and a complete ban, the Reserve Bank of India plans to implement its own version of CBDC when “needed.”