The latest rumors coming out of India were rather positive, as the government is reportedly considering legalizing Bitcoin and cryptocurrencies in the country. On the other hand, the leaders seem to have understood their interest in this eventuality, since recognizing cryptos will allow them to tax them.
2% crypto-taxes in the pockets of the state?
Despite the strong reluctance of the Reserve Bank of India (the Indian Central Bank), which would have preferred to see Bitcoin and cryptos banned outright, things seem to be well underway in India for citizens to be able to use crypto-currencies there without fear.
As The Economic Times reports, this legalization of digital assets would also be an opportunity to tax them, especially if they come “from abroad.” While crypto-assets and their blockchain have no borders, crypto-currencies purchased on exchange platforms outside the country could be subject to an additional 2% tax to Indian crypto-investors.
Indeed, cryptos could fall under the local “Google tax” as services provided in India by foreign e-commerce companies are subject to the so-called “equalization” tax – dubbed the “Google tax” since it was one of the main players targeted in the first place.
Under the interpretation of this regulation, the 2% levy would be applied on top of the crypto price, meaning that platforms might have to add it to the base price, before paying this tax back to the Indian state.
If there is taxation, there is recognition, and that’s the only good thing about this. Whether this tax will indeed (or not) apply to transactions on foreign crypto exchanges will depend on whether India will follow the lead of its Central Bank, which wants a ban on cryptocurrencies, or whether the country will move towards more flexibility.
