The Indian government is exploring ways to levy additional taxes on interest earned on cryptocurrencies through decentralized finance (DeFi) platforms located outside India, according to an Economic Times report.
See related article: India tax breaks crypto’s back
Fast facts
- The government wants to impose a 20% tax deducted at source (TDS) or factory-gate levy for DeFi transactions where either party resides outside India or has not furnished permanent account number (PAN Card) details, the report said.
- The government could also slap an additional 5% equalization levy tax, which is imposed on foreign-owned e-commerce companies servicing resident Indians.
- The Central Board of Direct Taxes is conferring with tax experts to figure out how these taxes can be implemented.
- Starting in April, the Indian government imposed a flat 30% tax on all cryptocurrency profits, which caused trading volumes on exchanges to decline sharply.
- A 1% factory-gate levy is due on July 1.
See related article: Indians see future in crypto, government sees revenue, FM says
