Crypto Taxation in India

Taxation is one of the complicated parts of money and people usually try not to get involved with this so they take help from someone who knows more and has a better understanding. Since this is something that is payable to the government so it is best to file correctly because if anything wrong is reported then there can be problems. Income tax filing for the year ended was extended until 31 Dec 2021 and the majority of taxpayers have done it already however there are people who still struggling because of the chnage in the portal.

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There is no clear taxation policy for crypto and anything that is earned through crypto is considered a standard income that falls under the same tax slabs. Its like anyone who is a taxpayer will follow the same slabs for the tax payment and there is no specific rule for crypto income. India has got quite a good number of crypto investors and govt also seem to be working on the regulation but the lack of clear information and policy its creating lots o chaos for the tax paeysr. They are not aware of the way to manage the crypto income and even tax consultant are having a tough time.

Rameesh Kailasam, president and chief executive of IndiaTech said: “The budget should ideally offer coherent rules on direct taxation and the GST Council should detail the applicability of taxation, else, there will be confusion. Basically, the line of thinking is that we shouldn't be waiting for a bill alone and the Budget should begin the process.”

Not just income tax but GST is also one of the parts that are not clear for exchanges and because of this we have recently seen the news about the wazirx exchange. Its high time that govt should take some serious action on the regulation side so that investors and exchanges can have a clear framework to follow the taxation part.

With the increasing number of new crypto investors and trading volume, it will be one of the big sectors or govt to earn significant revenue. I expect that exchange will apply GST on all the trade transactions which will cost slightly more to investors but it will also help the govt to earn more through trade revenue. As of now, SEBI is taking care of stock trading and every trade is liable for GST so in the same manner crypto trade can also fall in the same category.

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If govt considers crypto as an asset then most probably it will be treated the same as stocks where we can trade or hold bit it will not be used to buy anything. There are different tax rules for long-term and short-term gains but crypto is not part of it as of now however its necessary to clear this information because it can make things easy for people who are taxpayers.

I expect that this year 2022 will surely become one to have crypto regulation and this will also clear the road to clear crypto policies and clear taxation. Its a way to easy investing and more tax collection for the government.

Thank you so much

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