The Indian government is working to determine whether cryptocurrencies can be classified as goods or services, which can impose a different taxation scheme on digital assets, local media reported.
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- Government officials believe crypto trading is similar to gambling and lottery, which have a 28% goods and services tax (GST).
- Currently, cryptocurrency is categorized as a financial service in India, and an 18% GST is levied on transactions on exchanges.
- In her February budget speech, finance minister Nirmala Sitharaman announced plans for a 30% tax on crypto income as well as a 1% tax deducted at source (TDS) on every transaction.
- Since then, the Reserve Bank of India, India’s central bank, has warned against crypto transactions, with the deputy governor even suggesting an outright ban.
- Currently, the government is working on cryptocurrency legislation as the industry awaits further clarity.
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