The Indian government is mulling the taxation of cryptocurrencies as business income, in a decision which could double the tax burden on investors, according to a local report.
Fast facts
- Currently, crypto earnings are taxed as capital gains, which stand at 20%, while business income rates reach as high as 42%.
- Taxing each crypto transaction rather than a single levy upon liquidation of assets is also under consideration, according to two senior tax advisors involved in government discussions cited by the Economic Times.
- Additionally, India may levy an 18% Goods and Services Tax (GST) on crypto investors themselves, if exchanges pass on this tax burden.
- The government, which currently does not collect data from crypto investors, may also amend the Income Tax Act to mandate crypto gains disclosures.
- Tax authorities recovered around US$9.3 million from Indian crypto exchanges for alleged tax evasion last week, to which some exchanges blamed the ambiguities in existing tax laws.
- Crypto tax implications are expected to be on the table in the upcoming February budget session.