Tax Will Have To Be Paid On Earnings From Cryptocurrencies, The Government Is Preparing For Changes In Income Tax Laws

The central government is contemplating amending the income tax laws to bring virtual currency under the tax net. These changes can be part of the budget to be presented for the next financial year. Earnings from cryptocurrencies may have to be taxed. Revenue Secretary Tarun Bajaj said that in the context of income tax, some people are already paying capital gains tax on income from cryptocurrency. In the context of GST also, the law is very clear that the same rate of tax will be applicable on it as on other services. On classifying cryptocurrencies traders as facilitators, brokerages, and trading platforms and bringing them under the purview of GST, the Revenue Secretary said such things are already available in other services as well. Therefore, whatever GST rate is applicable to them, the same rate will be applicable to them as well. In early March 2020, the Supreme Court struck down an RBI circular banning cryptocurrencies. Subsequently, on February 5, 2021, the central bank constituted an internal panel to suggest a model for its own digital currency.

Any change during the presentation of the budget

Bajaj said, “People are already paying tax on it. Now its business has increased a lot, so now we will see whether we can make some changes in the law. Any changes in this context will be done only during the presentation of the budget. The budget is to be presented after two months and we will have to wait till that time." On the provision of TCS (Tax Collected at Source) on crypto trading, he said that if we bring a law on this issue then we will see what can be done.