Despite government’s repetitive warnings regarding trading and dealing in Bitcoin, the interest of Indians in cryptocurrencies is on a rise. With Union budget 2018 to be announced on Feb 1 everyone is expecting Finance Minister Arun Jaitley to provide clarity over bitcoin regulations in India
Tax and GST on bitcoin
Since the prices of bitcoin hit $20,000 there has been an upsurge in the bitcoin trading volumes from India. The Reserve Bank of India (RBI) has issued several warnings in 2017 and have cleared that bitcoin is not a legal tender in the country.
The pressure on Indian government to provide clarity over regulations on Bitcoin and other cryptocurrencies has been on a rise. The government is under huge pressure and is expected to release final statement regarding bitcoin taxation in the upcoming Union Budget on Feb. 1, 2018.
The confusion prevails over the head under which tax would be levied. The possible options are:
- Income from Business
- Capital Gains
or Other Sources?
As per RBI and Finance Ministry of India, Bitcoin is not a legal currency in the country. If it is not treated as currency that means it has to be either considered as goods or services. In either case As it is not a currency, it should be considered as goods or services in either case GST be levied from consumers. As of now a GST @12% is levied on Goods and GST of @18% is levied on services respectively in India.
As of now people there is no GST being levied by users on Bitcoins.
Rising demand for bitcoin in India
“The cryptocurrency craze has increased so much that there is a long waiting for registration” at crypto exchanges, the India Times reported in their news article.
The data from a leading Indian cryptocurrency exchanges has revealed increase in number of registrations on cryptocurrency exchanges in the country. Unocoin one of the leading cryptocurrency exchanges data revealed the numbers has grown from a mere 1000 user registrations per day in December 2016 to 10,000 user registrations per day in December 2017.
What do you think will be the possible regulation on BItcoin and other cryptocurrency in India? Let us know your thoughts in our comment section below! Let us know your thought in comments below.
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I am an associate content producer for the news section of Coingape. I have previously worked as a freelancer for numerous sites and have covered a dynamic range of topics from sports, finance to economics and politics.