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18 July, 2017

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Bitcoins Might Be Made Taxable under GST Soon

Bitcoins Might Be Made Taxable under GST Soon

By CA Ankit Gulgulia (Jain)

Currently, neither illegal nor legal in India, Bitcoin affords anonymity, in grey area

The government is considering the introduction of a regulatory regime for virtual or crypto currencies, such as Bitcoin, that would enable the levy of the Goods and Services Tax on their sale.
The new regime may possibly bring their trading under the oversight of the stock market regulator, Securities and Exchange Board of India (SEBI).

Image result for bitcoin price chart in india
Image Credit - Bitcoin.com
The idea is to treat such currency in a manner similar to gold sold digitally, so that it can be traded on registered exchanges in a bid to “promote” a formal tax base, while keeping a tab on their use for illegal activities such as money laundering, terror funding and drug trafficking
“The discussion on whether crypto-currencies should be banned or regulated has been on for some time. The pros and cons for both aspects were put forth in the meeting chaired by Finance Minister Arun Jaitley last month,” the official told The Hindu.
“Banning will give a clear message that all related activities are illegal and will disincetivise those interested in taking speculative risks, but it was pointed out it will impede tax collection on gains made in such activities and that regulating the currency instead would signal a boost to blockchain technology, encourage the development of a supervision ecosystem (that tracks legal activities and may also assist in tracking illegal activities) and promote a formal tax base,” said another official privy to the development.
Author's Comment :- The above statement is a clear indication that the government also understands the importance of Crypto currencies on both the fronts i.e.generation of tax revenues and alternative ecosystem to current payment systems.
Ultimately, according to The Hindu, bitcoin and other cryptocurrencies may come to been viewed as kinds of digital assets under Indian law.
Sources:- The Hindu , Coindesk.com

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