Tax authorities all over the world are starting to focus their attention on the cryptocurrency space.
Indian tax agency wants to tax crypto trades and exchanges
The Tax Department in India is in favor of taxing cryptocurrency exchanges operating in the country. This latest development comes despite the regulatory uncertainty surrounding cryptocurrencies in the country.
According to ET Now’s report yesterday, the government wants to start looking at the entire cryptocurrency ecosystem in the country. The Tax Department, which operates under the Ministry of Finance, is in favor of taxing the cryptocurrency exchanges operating in the country. The agency also wants to tax cryptocurrency transactions in India.
#ETNOWExclusive | Sources tell ET NOW's @29_ruchibhatia that the govt is looking to #tax #cryptocurrency trades and ecosystem in the country. #BTC #Bitcoin #crypto @FinMinIndia @PMOIndia @IncomeTaxIndia pic.twitter.com/5kc5Haf0fJ
— ET NOW (@ETNOWlive) September 13, 2021
Despite the Tax Department stating that it wants to tax crypto exchanges and transactions, some sources claimed that it doesn’t mean cryptos will become a valid asset class in India. Nischal Shetty, CEO of WazirX crypto exchange, stated that “It’s a no-brainer that your crypto earnings are taxable like other income and should be declared in the Income Tax Returns. As of now, it is not clear whether the GST would be applied on the amount of cryptocurrency bought or on the transaction fees paid by the user.”
US Treasury and IRS also want to issue a crypto tax guidance
The United States Treasury and the Internal Revenue Services released their Priority Guidance Plan for the 2021-2022 fiscal year last week. According to the plan, the IRS and the US Treasury made designing brokerage rules for cryptocurrencies a priority.
More tax agencies globally are issuing guidance to cryptocurrency exchanges and investors on how to properly report their crypto earnings.