The growing volume and value of cryptocurrency transactions across trading exchanges are grappling with the attention of the legislative bodies and tax authorities in India. With taxation, governments can achieve three major goals. First, regulate the cryptocurrency market in the larger interest of the public. Second, stop money laundering and illegal use of the asset. And, third, generate revenue from the trade in the form of income tax and GST.The Constitution of India under Article 246 grants the power to levy taxes to the Parliament as well as the state legislatures to impose taxes. Article 265 warrants the need for a predefined law before the Income Tax Department can impose the tax.Now, all eyes are on the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 that was discussed in the Lok Sabha and is scheduled to be tabled in Lok Sabha on March 08, 2021.Though the bill sought a ban on cryptocurrencies and the launch of an official cryptocurrency under the ambit of the RBI, this sounds like a distant dream. Meanwhile, top cryptocurrency entrepreneurs in India have united against the government decision under the umbrella of ABCE (Association for Blockchain & Crypto and Digital asset Entrepreneurs).They want to have a dialogue with stakeholders in the Indian government, regulators, and policymakers. The purpose is to explain the benefits of crypto to the government clearly and convince them. In a nutshell, the entrepreneurs expect regulation of digital currencies rather than a ban.Direct TaxUnder the current Income Tax Act, there is no specified field in the Income Tax Return Filing (ITR) form where citizens or PAN holders can disclose the income gained through cryptocurrency trading. However, if they liquidate or withdraw the cryptocurrency income, and transfer it to their bank account, then the interest paid by the bank against the deposit\u2026<\/p>","protected":false},"excerpt":{"rendered":"
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