India considers doubling taxes on cryptocurrencies

The Indian government is mulling the taxation of cryptocurrencies as business income in a decision that could double the tax burden on investors, according to a local report. Currently, crypto earnings are taxed as capital gains, which stand at 20%, while business income rates reach 42%. According to two senior tax advisors involved in the government discussions cited by the Economic Times, the taxation of each crypto transaction rather than a single levy on liquidation of assets is also under consideration. Additionally, India can impose an 18% Goods and Services Tax (GST) on the same crypto investors if the exchanges pass this tax burden.

The government, which currently does not collect data from crypto investors, may also amend the Income Tax Act to enforce disclosure of crypto earnings. Tax authorities recovered about $ 9.3 million from Indian crypto exchanges for alleged tax evasion last week. Some exchanges blamed the ambiguities of existing tax laws. The tax implications for cryptocurrencies are expected to be on the table in the next fiscal session in February.