India submits documents levying bitcoin trading tax. India’s finance ministry has called for Bitcoin (BTC) tax laws to be enforced in the country. The Ministry’s Central Economic Intelligence Bureau, or CEIB, recently submitted a draught paper, according to the Times of India, proposing to impose an 18% tax on Bitcoin trading on goods and services.
CEIB estimates put India’s estimated volume of Bitcoin transactions at over $5.4 billion. The 18% tax suggested could therefore see the government earning around $970 million from crypto taxes.
The CEIB is calling for virtual currencies to be listed as ‘intangible assets’ as part of the new proposal to come under the GST with taxes imposed on gains earned from trading.
Reacting to the news, Tanvi Ratna, CEO of Indian crypto policy advisory firm Policy 4.0, tweeted “Sadly, this does not necessarily imply that crypto will be legal. Under Indian law, illegal income is also taxable & evading its tax counts as criminal activity.”
Indeed, in 2011, India’s finance ministry provided clarification that tax evasion on illegal sources of income was a criminal offense. At the time, the government was reportedly moving toward reclassifying all forms of tax evasion as criminal offenses.
Apart from the Supreme Court reversing the Reserve Bank of India’s ban against banks servicing crypto exchanges back in March, not much has happened by way of cryptocurrency regulations in the country.
The lack of regulatory clarity is reportedly preventing greater investor involvement in the industry. However, India’s crypto peer-to-peer trading market continued to grow in 2020.