The Indian ministry of finance has formed a panel to examine how income from crypto investments can be taxed, according to a report by Inc42.
Fast facts
- The panel will evaluate whether crypto income can be taxed as capital gains or if it requires the formation of a new category. The committee is required to submit its report in four weeks. Currently there is no specific crypto tax in the country, but incomes from cryptocurrencies are charged an 18% tax by crypto exchanges under the Goods and Services Tax (GST). The government, however, admitted earlier this year it has no data on tax collected from cryptocurrency incomes.
- This latest development comes after it was reported earlier this month the government is looking to classify cryptocurrencies as commodities in the asset class.
- Cryptocurrencies currently have no legal status in India. The country has been mulling regulations — from a blanket ban to a softer stance — but nothing concrete has been decided. India’s crypto bill is currently pending before the Union cabinet for approval. If the cabinet nod is received by November, the bill could be introduced in the winter session of parliament.
- Finance minister Nirmala Sitharaman said this week that although India might not be ready to follow in the footsteps of El Salvador, which adopted Bitcoin as legal tender, “futuristic” technology like cryptocurrencies cannot be ruled out or ignored. India is currently mulling the launch of its own central bank digital currency and a pilot project could be launched by December this year, Shaktikanta Das, governor of the Reserve Bank of India, the country’s central bank, said earlier this month. Sitharaman said that India is being “cautious” about launching a CBDC but with several countries launching their own digital currencies, the country needs to “think it through.”