Key Takeaways
- Indian government working on a regulatory bill that taxes crypto trading profits
- India has a complicated relationship with bitcoin and cryptocurrencies
- RBI set to launch digital rupee in 2022
The Economic Times revealed that the Indian government was contemplating using a unique approach towards regulating cryptocurrencies.
This approach will include a new tax bill that will make all gains made from crypto trading taxable.
It is understood that the government believes that all revenue-generating activities should be taxed, and crypto trading falls into this category.
However, the proposed tax bill is not part of the crypto bill that is reportedly under development.
India has had a love/hate relationship with cryptocurrencies in recent years. The central bank of India (RBI) banned the use of crypto-assets in 2018.
This directive was subsequently reversed in May 2020 following a verdict from the Supreme Court.
The Supreme Court verdict has not changed the general perception about bitcoin and cryptocurrencies.
On the contrary, government officials have publicly stated that bitcoin was a financial tool used by criminals to fund crimes and terrorism.
At the same time, the RBI has published several statements telling citizens to desist from trading and hodling crypto.
Nevertheless, Indian’s continue to trade and hodl cryptocurrencies with a growing local community springing up.
The Reserve Bank of India has looked to stem this trend and confirmed that it had begun trials to deploy a national digital currency.
This latest tax bill that has been proposed could have significant ramifications for the local crypto economy.
It remains to be seen how the Indian government can effectively tax traders profits without a comprehensive regulatory system.
What do you think of the proposed tax bill in India?
