India's Central Board of Indirect Taxes and Customs (CBIC) has reached out to a bunch of crypto exchanges operating in the country. The body is seeking lists of all the cryptocurrencies that are being traded on the exchanges in India. The tax authority of India is reportedly evaluating if the goods and services tax (GST) can be levied on the taxability of crypto transactions. The government body is also working to determine a concrete classification category to position crypto assets under.
By the end of November, the CBIC has reportedly asked crypto exchanges to provide all the necessary information.
“We had meetings with crypto exchanges on wide-ranging issues relating to the asset class. We have sought a detailed report on different crypto products being traded and their respective transaction fees and how they are getting calculated,” media reports have quoted people familiar with the matter as saying.
The process is expected to better determine the crypto transacting trends that are catching pace in the Indian fintech market.
The Indian government brought cryptocurrency under its tax regime earlier this year. All income churned from crypto transactions are being taxed at 30 percent since April and a 1 percent tax deducted at source (TDS) for crypto transactions has also been live in India since July.
The taxes have failed to make the crypto community happy in India. Recently, a Bengaluru-based tea seller who enabled crypto payments told Gadgets 360 that at this point, he is not seeing any profits on his crypto earnings.
Now, India will be taking up the presidency of the G20 group and will continue to preside the international union for the next one year, starting in December. As per Finance Minister Nirmala Sitharaman, India is looking to work with the other 19 member nations of the G20 in formulating a framework around cryptocurrencies, that would work on an international level.
Since cryptocurrencies are not governed by any central bank or a regulatory body, they are often misused for transferring large amounts of money to cross border locations, under a shroud of anonymity. In her speech at the recent press briefing, the Finance Minister noted that the use of crypto in money laundering is a problematic issue linked with digital assets.
Despite its reluctance to experiment with cryptocurrencies, India is keen on exploring the potential of blockchain technology. The Reserve Bank of India (RBI) is launching the pilot for a central-bank-backed digital rupee CBDCon Tuesday, November 1. A total of nine banks, including top lender State Bank of India have been picked to participate in the project.
The pilot's use case will be to settle secondary market transactions in government securities, with the e-rupee expected to make the interbank market more efficient, the RBI said in a statement.
“The launch of CBDC will require a robust crypto security infrastructure in India to ensure hack proof CBDC operations and prevent financial frauds. Once implemented, the transaction volumes for CBDCs can go through the roof. The CBDC infrastructure should be a resilient environment that can operate 24x7 with zero downtime and at the same time protect the sensitive personal data of billions of its potential users,” Manan Vora, Senior Vice President- Strategy and Operations, Liminal told Gadgets 360.
Back in September, India secured the fourth rank on the 2022 Global Crypto Adoption Index compiled by blockchain research firm Chainalysis. With this, India surpassed Russia and the US on the index, hinting that the Indian crypto community is not very far behind in driving more adoption of the technology.
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