India Reportedly Considering Taxing Gains from Cryptocurrency Trading

The Indian government continues with its indecisive approach towards the crypto industry. A recent report claimed that the authorities plan to implement new taxation on gains from digital asset operations instead of the recently-discussed ban.

• Citing sources familiar with the matter, the Economic Times reported that India is contemplating taking a different approach to the digital asset space.
• The local tax department considers implementing new taxation legislation for all gains made from cryptocurrency trading and investing.
• Nevertheless, the sources said this would not mean that the second-most populated nation will accept cryptocurrencies as a valid asset class. The government believes every activity generating any income for locals should be taxed.
• India is arguably the country with the most controversial views on the digital asset industry. Its central bank had forbidden all of its customers to operate with anyone even remotely associated with the space back in 2018.
• The Supreme Court reversed this decision in early 2020, but the RBI continued its stance against digital asset usage, even though some reports suggested that locals are quite fond of BTC and other cryptocurrencies.
• Instead, the Reserve Bank of India prefers to have more control over what currencies the public uses. As such, the governor – Shaktikanta Das – recently confirmed that the institutions will launch trials for a central bank digital currency by the end of the year.
• Separately, the government also wanted to incorporate an 18% tax on any foreign cryptocurrency exchanges operating in the large local market.