The government is considering to tax cryptocurrencies, like Bitcoin, at par with casinos, lotteries, betting and racecourses, sources said.
The highest decision-making body on indirect taxes, the Goods and Services Tax (GST) Council, is considering to levy 28 per cent GST on cryptocurrencies.
According to a media report, the GST Council is likely to discuss the proposal to tax cryptocurrencies in the upcoming meeting. The date for the meeting is not yet finalised.
The proposed 28 per cent GST will be in addition to the 30 per cent income tax on earnings from crypto asset transactions.
In the Union Budget 2022-23 Finance Minister Nirmala Sitharaman proposed to impose 30 per cent tax on income arising from the transfer of virtual digital assets. The new rules came into effect on April 1.
As per the new rules, gains from all virtual digital assets including cryptocurrencies will be taxable at 30 per cent.
Gains from virtual digital assets including cryptocurrencies are taxable even if a taxpayer’s total income is below the threshold limit of Rs 2.5 lakh.
Imposing 28 per cent GST will make cryptocurrencies heavily taxed. This will bring cryptocurrencies at par with casinos, betting and lottery as far as the level of taxation is concerned.