India may start applying 18% Goods and Services Tax (GST) to cryptocurrency trading. They will be classed as intangible goods.
The Indian government may start following the lead of the US and start applying taxes on cryptocurrency.
According to a report by Bloomberg Quint, sources who has direct knowledge of the discussions say the GST could be at 18%. This means cryptocurrency traders are going to be taxed for every trade they do. Miners will also be charged 18% tax on their mining rewards.
And don’t think you’re safe if you’ve had your earnings last year. The sources claim that tax will be applied retrospectively from July 1 2017. Trading with other countries will be considered as imports and exports so the Integrated GST will be applied.
In the US, cryptocurrencies are considered as property, similar to real-estate. Buying and holding Bitcoin is not taxable but the profit from selling them is liable to capital gains tax.
Although there are no decisions made so far, cryptocurrency taxes may start as soon as July 1.
Earlier this month, it was noted that a lot of startups in the cryptocurrency sector are moving away from India. This is because of the country’s subsequent crackdowns on tax avoidance from crypto earnings.