Will Budget Evade Bitcoin? Why Clarification on Cryptocurrencies Is Needed

Business News

Presently people are not paying GST on Bitcoin; however, the government is working on it so that it can provide clarity. It is expected that the FM Arun Jaitley will give certainty on this matter in the Budget 2018. He would clear the air about the taxability of Bitcoins in India. People are waiting for Finance Minister Arun Jaitley to present the Union Budget on February 1. People expect a lot from the upcoming budget. Thus, some clarity is also needed regarding the taxability of Bitcoins in India.

We all are aware that in past one year, the price of Bitcoins has sky-rocketed in India. During the same period, it has shot up more than 2000% and a lot of people have made a lot of money. Amongst Indians, the trend for Bitcoins has also been rising. Many investors are buying Bitcoins with the hope that the price will increase further. In India, the growth of several Bitcoin exchanges has also made buying Bitcoins much easier.

On the other hand, there is still some confusion in the minds of investors that how income tax would be levied on the gains arising from Bitcoins. People are confused whether or not the gains arising from the sale of Bitcoins would be considered as speculative income. There is also confusion regarding the head under which tax would be levied. Whether it would be considered as Income from Business or from Capital Gains?

Investors have said that they do not mind paying taxes, but at least there should be clarity from the government about how they intend to tax the Bitcoin income. The demand for clarity has been raised as later on; nobody wants to face tax scrutiny from the tax officials. As there is no clear-cut guideline from the government, so it is very confusing for investors to determine the actual tax liability.

Various tax professionals have various opinions. There is another issue on which investors are seeking for clarity and that is whether or not GST would be levied on Bitcoins. Till now there is no government stand on this, but now the government has started working on this and clarity is expected in the union budget 2018.

Bitcoins are not treated as a legal currency in India by RBI. Therefore, some experts believe that as it is not a currency, it should be considered as goods and GST be levied @12%.

However, at present people are not paying either tax or GST on Bitcoins.

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