Cryptocurrency trading may soon face a tax structure in India as the Ministry of Finance has reportedly formed a new committee to find out if income made by crypto-trading could be taxed. The development comes at a time when the country awaits the announcement of an official Cryptocurrency Bill that will be presented before the Parliament in its upcoming Winter Session. For now, while trading in cryptocurrencies has witnessed momentum in India, the country has no solid laws to regulate it.
Four weeks have been granted to this new panel formed by the finance ministry, Inc42 reported on Wednesday, September 22.
At the end of the allotted time duration, the panel will have to inform if income made by trading in cryptocurrencies can be taxed as capital gains or they would need to be classified under a newly created tax category.
The taxation analysis on cryptocurrency trading-based income by this committee will reportedly be included in the final draft of the Cryptocurrency Bill.
In recent months, the cryptocurrency space in India has witnessed expansion. In India, Pakistan, Ukraine, and Vietnam, the rate of cryptocurrency adoption rose by 880 percent in, as per a report released earlier this month.
According to a report by TechStory, around seven million Indians have invested a collective sum of over $1 billion (roughly Rs. 7,380 crores) in cryptocurrencies.
Amid the growing crypto culture, Indian finance minister Nirmala Sitharaman has been overlooking the draft formulation 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.