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Bitcoin trading might soon be levied with IT and GST taxes

Bitcoin trading has been increasing exponentially all over the world. And India is one of the countries that has many investors keen on investing in the cryptocurrency. But the ban news from the government has kind of effected the market and has led to many investors backing out from it. It is also being reported that even if the ban might not take place, Bitcoin trading might become taxable by the government. This might be a huge move by the finance ministry of the country. It is also going to garner a lot of attention and create controversy.

Government’s benefit in making Bitcoin trading taxable

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A finance ministry official stated the new about the government taxing the traders. He said, “Bitcoins will be categorised as financial services attracting 18 per cent GST on fee commission collected under this segment. Plus, tax (personal I-T) to be paid on the earnings from this”. It is estimated that almost Rs 40,000 crores of trading happen sin Bitcoin every year. This data isn’t up to date but can give an estimated idea about the market’s size. And the government levying an 18% tax means that they get around Rs 7,200 crores annually.

And as the number of investors increases and the price of bitcoin increases, this amount will also increase substantially. So, as time goes on, it is sure that the government is going to generate a lot of tax from investors trading Bitcoin. This will also make the cryptocurrency regulated and hence reduce the no of illegal transactions made using it. Investors are already asking the government to regulate crypto if necessary but not ban it. So, with this move, both sides of the coin will be in agreement, and there won’t be much backlashing.

What are your thoughts on the fact that Bitcoin trading might not be taxfree anymore? Let us know in the comments below. Also, if you found our content informative, do like and share it with your friends.

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