Modi government has not been able to make a complete framework for banning bitcoins and taxmen have come into the fray to share the tax on it. Tax authorities are considering this keeping in mind both GST and income tax, but are not yet able to understand how much tax should be levied.
The Modi government has prepared to cryptocurrency ban. Bitcoin was first banned in 2018 through the Reserve Bank, but later the Supreme Court allowed people to invest in virtual currency. Now the Modi government is making laws to ban it and through that it will be banned and rules will be made for the regulation of government cryptocurrency. Before this, many taxmen have got into the field of how they will collect tax on the earnings from cryptocurrency. At the same time, the experts of blockchain are in the process of going out after the introduction of the new law.
What are taxmen saying on cryptocurrency ban ?
All tax authorities are considering how direct and indirect tax will be levied on cryptocurrencies. The biggest concern is that it is not yet understood which category of cryptocurrency to be placed. GCAT on all products and services is done according to different categories. By the way, many experts are also believing that cryptocurrency can be kept in the 18% tax category. It is also reported that after the law of the regulation of cryptocurrency, investors will be given three months time to sell their crypto assets.
The same problem is being faced in the case of direct tax. Tax authorities are not able to understand whether the income generated from cryptocurrency should be taxed like the income from business or like the income earned from investment. Some experts believe that active trading can be seen as a speculative business, which can be taxed at up to 42% of the normal tax rate. It is also believed that after the imposition of GST on the exchanges and income tax on the investors, their profit of last one year can go to all of them.
Crypto Industry and Experts Want to Get Out!
The cryptocurrency industry is believing that the ban on cryptocurrency after the new law will lead to the same situation as it did after the ban by the Reserve Bank in 2018. At that time blockchain experts had migrated to countries such as Switzerland, Singapore, Estonia and the US. It may be that this time too, he will turn out after getting banned. In such a situation, the government will also have to take care of it.