Reetu | Dec 4, 2021 |
Government is considering include cryptocurrency in the tax bracket
Indians who trade or invest in cryptocurrencies on Indian platforms, as well as those who hold them outside the nation, may be subject to taxation. In the forthcoming budget, the government intends to change current income tax and transparency rules to incorporate terminology like bitcoin.
According to those familiar with the situation, the government aims to capture cryptocurrency income and investments both within and beyond India.
The government is considering modifying Section 26A of the Income Tax Act, as well as the Annual Information Regulation (AIR), which displays information on all of a taxpayer’s investments and is sometimes referred to as a “tax passbook.”
One of the people added, “There is a recommendation to add the words cryptocurrency, crypto assets, or digital money in several portions of the Income Tax Act.” “This means that anyone filing tax returns will have to disclose their cryptocurrency investment or trading revenue separately.”
AIR is responsible for disclosing any fixed deposit, mutual fund, recurring deposit, or jewellery investment of $2 lakh or more.
The issue is that because bitcoin is not specified under the Income Tax Act, the tax authorities will be unable to lawfully force banks to reveal client cryptocurrency transactions.
After such an adjustment is implemented, the taxman will be able to obtain information about individual transactions conducted through banking systems. Indians have primarily used these to deposit funds earned through cryptocurrency investment and trade. The government is also considering changing foreign asset declaration rules to require Indians to reveal whether they own cryptocurrencies in other countries. Current requirements require Indians to disclose all assets they own as well as any income they may have received from real estate or overseas trusts during the year.
The two adjustments to the existing tax code are unrelated to the government’s proposed cryptocurrency system.
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