Rajkotupdates.news: Government May Consider Levying TDS TCS On Cryptocurrency Trading, a bill to regulate cryptocurrencies is in pipeline for the forthcoming Budget Session recently announced by Srivastsan. As cryptocurrencies users are increasing in India, there is a dire need to introduce a bill to regulate the transaction and manage any fraudulent activities. The market expert's comments were made as the "Cryptocurrency and Regulation of Official Digital Currency Bill" was being prepared for introduction.
"The government will likely impose a regressive tax regime on cryptocurrencies,"
"A law to regulate cryptocurrencies was scheduled to be introduced during the Winter Session of Parliament. Though the law was not introduced yet, although there is a possible that it may be discussed during the upcoming Budget Session and might be implemented soon. "We expect the government to introduce a regressive tax regime for cryptocurrencies if it does not prohibit Indians from dealing in cryptocurrencies.
Nangia Andersen LLP Tax Leader Aravind Srivatsan said “the government could consider imposing TDS/TCS on the sale and purchase of cryptocurrencies above a certain threshold in the upcoming Budget, and that such transaction should be brought within the ambit of specified transaction for the purpose of reporting to income tax authorities. Income from the sale of cryptocurrencies should be subject to a higher tax rate of 30%, he added, just like lottery, game show, puzzle, etc. prizes”. This is a big news for cryptocurrencies traders and make a big hole in their pocket. Everyone in the fraternity is shocked with this news and unable to digest the conversations done at Government’s end.
As reported by Rajkotupdates.news: Government May Consider Levying TDS TCS On Cryptocurrency Trading, TDS (Tax Deducted at Source) and TCS (Tax Collected at Source) are two tax-related pravail in India. However, now as the Government is planning the application of TDS and TCS to cryptocurrency trading, it would depend on many factors as the tax regime in India is quite complex and not easy to implement a new structure or cryptocurrencies. Possible ways TDS and TCS could be applied to cryptocurrency trading:
TDS on Income from Cryptocurrency Trading: If the income generated from cryptocurrency trading is considered as taxable income under the Income tax laws (India), the tax deducted would be 30% percentage of the income earned. Though it is less as compared to other western countries.
TCS on Cryptocurrency Transactions: There is a possibility to imposes a tax on cryptocurrency transactions (every transactions), in such case TCS could be applicable on each transactions. Tax collected would be 30% percentage (estimated) of the transaction value.
TDS on Fees Charged by Crypto Exchanges: Crypto exchanges charge fees for trading and other services provided to traders. If the fees charged by the exchanges are considered as taxable income, then TDS could be applicable on such fees as well.
TCS on Purchase of Cryptocurrencies: If the government imposes a tax on the purchase of cryptocurrencies, there is a high possibility to impose tax on them. Government is thinking of around 30%-40% (it may vary).
Though lot of people are unhappy with this news, but they can’t do anything to stop the same as it’s a government decision to regulate it, however we are sure it will also have to make it better in longer term.
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