The Indian Ministry of Finance has called for Bitcoin (BTC) tax laws to be passed in the country. According to the Times of India, the ministry’s Central Economic Intelligence Bureau (CEIB) recently tabled a draft proposing to impose an 18% tax on goods and services on bitcoin trading.
CEIB figures assume an estimated Bitcoin transaction volume in India of over 5.4 billion US dollars. With the proposed 18% tax, the government could make about $ 970 million from crypto taxes.
As part of the proposed plan, the CEIB is pushing for virtual currencies to be classified as “intangible assets” under the jurisdiction of the GST, with taxes being levied on profits from trading.
In response to the news, Tanvi Ratna, CEO of Indian crypto policy consultancy Policy 4.0, tweeted:
“Unfortunately, that doesn’t necessarily mean that crypto is legal. Under Indian law, illegal income is also taxable and bypasses its tax counts as a criminal activity. “
Indeed, in 2011 the Indian Treasury Department made it clear that tax evasion on illegal sources of income is a criminal offense. At the time, the government reportedly tried to classify all forms of tax evasion as criminal offenses.
Aside from the fact that the Supreme Court lifted the Reserve Bank of India’s ban on banks serving crypto exchanges back in March, not much has happened in the country about cryptocurrency regulations.
The lack of regulatory clarity reportedly prevents greater investor participation in the industry. However, India’s crypto peer-to-peer trading market continued to grow in 2020.