How much GST will be levied on Cryptocurrency in India? Easy Guide

GST on Cryptocurrency in India: In India, more than 20 million people are investing or exchanging their money in cryptocurrencies. On the other hand, if we talk about the total value, Indians hold cryptocurrencies of around $5.3 billion. Young people and women have also invested a lot of money in cryptocurrencies. In such a situation, the new rules that the government is introducing on cryptocurrencies, it is surprising to us.

From April last month, the government has started levying a 30 percent tax and one percent TDS on earnings from cryptocurrencies. In such a situation, according to sources, new news is coming that GST in cryptocurrencies is surprising us even more. Due to this, investing in crypto is becoming difficult and at the same time, crypto is also quite risky.

So in this post let us clarify the answers to all the crypto-related questions that arise in our minds. Just as cryptocurrency is legal in India, how much tax percentage is already applicable on cryptocurrency income in India? Will there be GST on cryptocurrencies and will cryptocurrencies be won like a lottery?

Is cryptocurrency legal in India?

Before knowing whether cryptocurrencies will attract GST or not, let us know whether cryptocurrency is legal in India or not. So the answer is in simple words. No, cryptocurrency is not legal in India. But it also does not mean that cryptocurrency is illegal in India.

The government is imposing a 30% tax on cryptocurrency earnings from April this month. But it has clearly stated that the imposition of tax does not mean that cryptocurrencies are legal in India. The government is still in talks about regulating cryptocurrencies. It may be possible to give legal status to cryptocurrencies in the future, but have not yet been granted legal status. You can trade or invest in it at your own risk.

What is the percentage tax on cryptocurrency income in India?

The government has already imposed two types of taxes on cryptocurrencies. The government began levying a 30% tax on cryptocurrencies earnings in India in April last month. In addition, 1% TDS is also being charged. So let us understand both the taxes with an example. We will first understand the 30 percent tax rule, then the one percent TDS rule.

30% Tax Rule:

For example, you will have to pay 30% tax on any cryptocurrency you sell or profit from NFTs. Let us understand with an example that you bought cryptocurrencies or NFTs for ₹100,000 and sold them for ₹120,000. So here you make a profit of ₹20,000. But this Rs 20,000 is not his complete. Here you have to pay 30% tax to the government on your winnings.

That is, 30 percent of Rs 20,000, you will have to pay Rs 6,000 to the government. After that, your net profit will be ₹14,000 (20,000 – 6,000) and Rs 14,000 will be completely yours. Yes, you will not pay 30% tax if you sell the purchased cryptocurrency or NFT at a reduced price or incur a loss.

One Percent TDS Rule

This 1% TDS will be deducted from you on every cryptocurrency transaction. Every time you sell cryptocurrency or transfer it to family, friends, or relatives, your 1% TDS will be deducted. TDS of 1% will be deducted on both profit and loss. You will be charged a one percent tax at the same time as the platform or application through which you sell cryptocurrencies.

Let us understand with an example. For example, suppose you buy bitcoin for ₹ 1,00,000 and sell it only for ₹ 1,00,000. Hence, Rs 1,00,000 will be deducted as 1% tax at the time of sale. So Rs 1,000 is our tax. And you have ₹99,000 left. However, you can recover the loss due to TDS at the end of the year by income tax.

Therefore, in addition to these two taxes, the government will also levy a GST tax on cryptocurrencies. So, in the next section, let’s understand when the GST tax on cryptography is applicable, what is likely to happen, and what percentage of GST is applicable.

Is there GST in India’s cryptocurrencies?

According to sources, the GST Council will levy 28% GST (GST) on revenue from cryptocurrency or NFT transactions. The government has not imposed a GST tax on any cipher so far. However, cryptocurrencies may also be taxed GST after the next financial meeting. This 28% GST tax will be added to a 30% tax on cryptocurrencies and 1% TDS.

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In other words, if the government imposes GST on cryptocurrencies, then you will have to pay three types of taxes. The first is 30% tax, the second is 1% TDS, and the third is 28% GST. 30% tax and 28% GST are levied on revenue and the same 1% TDS is applicable on all transactions. Talking about which, the next GST Council will be held in May this month.

Is Cryptocurrency Revenue Like a Lottery?

If the Indian government introduces GST for cryptocurrency revenue, then cryptocurrency revenue will also be like a lottery. This is because casinos, bets, and lotteries are currently subject to 28% GST and 30% tax.

In this way, income from digital assets like cryptocurrencies and NFTs will also be like a lottery. The government has already imposed a 30% tax and 1% TDS on digital assets and cryptocurrency revenue and may start levying an additional 28% GST.

I hope you liked this post and you must have got the idea about many facts like, is GST applicable to cryptocurrencies, what percentage of GST applies to cryptocurrencies, and How much percent tax is already being levied on cryptocurrencies, are cryptocurrencies legal in India, etc. All questions have been answered. Through this post, we have clarified all the small things.

I hope there is probably no doubt left in it. At the same time, let us tell you that cryptocurrencies are not yet regulated in India. Yes, cryptocurrencies are taxed. Treasury Minister Nirmala Siseraman, who visited the United States last month, said the Indian government now wants to examine the strengths and weaknesses of cryptocurrencies more closely. You can prevent all kinds of money laundering and terrorist financing by cryptocurrencies.

In addition, the finance minister also talked about global regulations, now only a few days will tell us what will happen to cryptocurrencies. However, the acceptance of cryptocurrencies and digital assets is increasing rapidly. Cryptocurrencies are based on advanced security technologies like blockchain, so people are increasingly adopting them.

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