Cryptocurrency trading may soon face a tax structure in India, as the Ministry of Finance reportedly formed a new committee to determine whether income generated from crypto trading could be taxed. This development comes as the country awaits the announcement of an official cryptocurrency bill that will be presented to Parliament in its next winter session. As of now, while the cryptocurrency trade has seen some momentum in India, the country does not have strong laws to regulate it.
Four weeks have been granted to this new panel formed by the Ministry of Finance, Inc42 reported on Wednesday, September 22.
At the end of the allotted time, the panel will need to indicate whether the income generated by trading in cryptocurrencies can be taxed as capital gains or whether they should be classified in a newly created tax category.
The income tax analysis based on cryptocurrency trading by this committee would be included in the final draft of the cryptocurrency bill.
Over the past few months, the cryptocurrency space in India has grown. In India, Pakistan, Ukraine and Vietnam, the cryptocurrency adoption rate has increased by 880%, according to a report released earlier this month.
According to a TechStory report, around seven million Indians have invested a collective sum of over $ 1 billion (around Rs. 7,380 crore) in cryptocurrencies.
Amid the growing culture of crypto, Indian Finance Minister Nirmala Sitharaman has neglected the drafting of the Cryptocurrency Bill.
Meanwhile, the Reserve Bank of India (RBI) is also working on launching its first official digital currency as a regulated “central bank digital currency (CBDC)” by the end of 2021.