In India, cryptocurrencies may be subject to a 28 percent Goods and Services Tax, putting them in the same category as betting and lotteries. Crypto transactions are already subject to a 30 percent gain tax and a 1% tax deducted at source. The government is adopting blockchain technology, with NSDL, the country’s oldest depository, employing it for bonds.
After years of keeping silent, India has just taken a firm stance on the crypto market: it can exist, but only with strict taxation and rules regarding its use.
GST is a country-wide indirect tax on all products and services. The GST Council is in charge of it. Crypto transactions categorized as financial services by crypto exchanges are subject to an 18 percent tax rate under the present GST system.
Now, Indian investors, who account for a significant chunk of the market, could face even higher levies as officials finalize a 28 percent Goods and Services Tax (GST) on transactions.
The new taxation structure considers the crypto asset class to be in the same category as lotteries, casinos, and betting, all of which are taxed identically. This issue was initially reported earlier this year, and it seemed evident at the time that the government would impose more fees, albeit the details were unclear.
In India, cryptocurrency is already taxed at 30% on gains and 1% at the source. There have also been discussions about imposing a 20% tax on DeFi transactions. The goal of this plan, according to the report, is to align crypto-specific GST tariffs with tax rates proposed in India for online gaming and betting services.
If implemented, the proposed tax would boost the cryptocurrency sector’s overall tax burden in India. The proposal comes a month after India’s finance ministry announced a 30% tax on all cryptocurrency-related personal income.
