According to a local report, the country’s tax authority has been monitoring the crypto industry and is seeking to impose as much as 30% tax on digital currency earnings. Cryptocurrency trading in India has surged since the Supreme Court overturned the Reserve Bank’s blanket ban on the crypto industry. Most crypto trading platforms have recorded a surge in user signups and trading volume. WazirX, the largest exchange, has recorded a 125% increase in signups in the past six months. Its biggest rival, CoinDCX, has registered an 85% growth on its part. Cryptocurrency-related funding in India has also increased this year.
India’s tax authority is seeking to impose income tax on crypto earnings.
According to the Economics Times report, India’s Income Tax Department is contemplating imposing income tax on digital currency earnings. According to the report, the agency has been monitoring traders’ earnings on trades made through banking channels. Sumit Gupta, the CEO of CoinDCX, further revealed that the agency could monitor earnings via the exchanges or other payment channels. The CEO was quoted by the crypto news outlet CoinDesk saying, “The tax authority can also monitor earnings of cryptocurrency investors registered through KYC/AML compliant exchanges like CoinDCX and through national identity documents such as the PAN card.”
The Income Tax Department might treat active trading as a speculative business.
According to local tax expert Amit Maheshwari, the tax department will treat active trading as a speculative business. Income Tax Department will attract normal tax rates, which could be as high as 30%, Maheshwari, a partner at consulting firm AMK Global, told Economic Times. Most tax experts anticipate a 30% tax on cryptocurrency gains. Many are advising their clients to file their returns as capital gains, as they would with stocks, to attract a lower tax rate. Indian crypto community has been pushing for clear regulations from a long time.
