Indian government may double tax on cryptocurrencies

According to a local report, the Indian government is considering taxing cryptocurrencies as business income, a decision that could double the tax burden on investors. Currently, crypto income is taxed as capital gains at a rate of 20%, while business income is taxed at a whopping 42%. A tax on every crypto transaction rather than a single tax on asset liquidation is also being considered, according to the Economic Times, citing two senior tax advisers involved in the government’s discussions. Additionally, India may impose an 18% Goods and Services Tax (GST) on crypto investors themselves if exchanges pass on this tax burden. Governments that do not currently collect data from crypto investors may also amend the Income Tax Act to mandate disclosure of crypto earnings. Last week, tax authorities recovered about $9.3 million from Indian cryptocurrency exchanges for alleged tax evasion, with some exchanges blaming ambiguities in existing tax laws. The crypto tax impact is expected to be discussed at the upcoming February budget meeting.