The direct tax rules are simple and 30% tax will be applicable on these, a new complication in the form of GST has emerged, say tax experts.
“There is no clarity on GST rate applicable as the question is whether there is any supply of services happening in the first place.
Secondly, all the cryptocurrency transactions between such taxpayers and the companies that are paying have to be cross verified to make sure that this is not a conduit for anything that’s disallowed under Indian legal system,” said Gaurav Mehta, founder of Catax, a cryptocurrency tax consultancy firm.
Insiders tell ET that the government could be looking to come out with clarity on the GST applicable on such transactions.
The finance minister had in February introduced a 30% income tax on returns from digital currencies.
The government also introduced a 1% TDS on digital assets. The government has, however, not used the word ‘cryptocurrency’ in the guidelines announced in the budget but virtual digital assets.
Many tax experts claim that in such a situation, the tax will be Rs 30,000—at 30%—and investors will not be able to set off losses from Ethereum trading, ET wrote.