The Indian government is assessing the prospects of an 18% tax on bitcoin trading in the country.
The central government is currently considering a proposal to impose a goods and services tax on bitcoin transactions, which amount to 40,000 crore rupees ($5.45 billion) per year.
The proposal was made by the Central Bureau of Economic Intelligence, a division of the finance ministry that is studying the potential taxation of cryptocurrency in India.
Under the goods and services tax, bitcoin would be considered an „intangible asset,“ so the tax could be levied on all transactions.
If the initiative is legitimized, the amount would be significant, as India is the second-largest bitcoin trader in Asia.
According to Paxful, in 2020 alone, bitcoin trading in India reached a total of $74,915,214, a Z47% increase over 2019.
This surge in cryptocurrency trading came after the Supreme Court overturned a two-year ban imposed by the Reserve Bank of India (RBI) on cryptocurrency trading and financial institutions.
Currently, there are no clear rules on cryptocurrency regulation in the country, so the country’s crypto-exchanges Cryptosoft continue to operate without any explicit restrictions.