The Finance Ministry has constituted a group to examine the scope of taxation on income made from cryptocurrency trading. Reports said that the committee will examine if the income from trading in cryptocurrencies can be taxed as capital gains or a new category should be created.
The panel will have to submit its report in 4 weeks. The development comes at a time when the government is in the process of formulation of the new cryptocurrency Bill. The draft bill which is expected to be tabled in the Parliament in its upcoming winter session will treat cryptocurrencies as an asset/commodity.
Touted as the most important asset class of the 21st century, more than 1.5 Cr Indians are currently holding over INR 1,500 Cr worth crypto assets. Finance Minister Nirmala Sitharaman recently said that she is awaiting approval from the Cabinet on a bill on cryptocurrency. The inter-ministerial panel on cryptocurrency under the Chairmanship of Secretary (Economic Affairs) to study the issues related to virtual currencies has submitted its report.
The investment in cryptocurrencies grew from nearly $923 Mn in April last year to $6.6 billion in May this year in India. According to the latest report by blockchain data platform Chainalysis, India currently ranks 11th out of 154 nations in terms of cryptocurrency adoption. India has more than one crore crypto investors, and the number is significantly growing every day with several domestic crypto exchanges operating in the country.
However, Indians own less than 1% of the world’s Bitcoin to date. The RBI is also set to launch its first digital currency trial programmes by the end of the year, according to its governor Shaktikanta Das. Bitcoin is currently hovering around the $50,000 mark (as of September 3). The most popular cryptocurrency has been trading in the green with a market cap of nearly $943 Bn.