Indian Tax Authority Asks Crypto Exchanges For Details About Coins Traded

According to reports, the tax authority in India has reached out to major crypto exchanges in the country and asked them to provide information about the coins being traded on their respective platforms.

The tax authority will also assess the taxability of crypto transactions for determining if the goods and services tax (GST) is applicable to them.

Information required

The Central Board of Indirect Taxes and Customs (CBIC) in India has gotten in touch with prominent crypto exchanges in the country.

According to a report on Friday, it has demanded details regarding the various cryptocurrencies that are available for trading on these exchanges.

A senior official of the tax authority said that they had conducted meetings with crypto exchanges on a variety of issues related to crypto assets.

The official said that they had asked them to provide an extensive report regarding the numerous crypto products that are traded, along with the transaction fee associated with them, and how their calculation is done.

Moreover, the CBIC is also working on assessing the taxability of crypto transactions in order to determine if they can be subjected to the goods and services tax (GST).

Another area that the tax authority is focusing on is the classification and definition of crypto assets.

Better understanding

According to the official, the tax authority would be able to figure out how to apply GST to crypto transactions and determine an appropriate tax rate for them.

This would be possible if they are able to get a better understanding of exactly what crypto products are traded and how the transactions are conducted.

The crypto exchanges have been given a deadline by the tax authority until the end of the month for providing the required information.

Currently, the GST levied on the services that these crypto exchanges provide stands at 18%. Back in April, the Indian government introduced a tax of 30% on crypto income.

Likewise, a tax deducted at source (TDS) of 1% was also put into effect in July on all crypto transactions conducted on exchanges.

The Ministry of Finance also revealed last month that it was working on figuring out how crypto could be subjected to GST.

Crypto policy

The crypto policy is still a work in progress in India as the government has still not come up with clear rules for the space.

Earlier this month, Nirmala Sitharaman, the Finance Minister, said that the government is planning on discussing the crypto regulation in its G20 Presidency for establishing a regulatory framework driven by technology.

Last month, a government official said that the stance on the legal status of cryptocurrency would be finalized in India by the first quarter of next year.

This would help the country in becoming compliant with the standards set forth by the Financial Action Task Force (FATF).

Meanwhile, the Reserve Bank of India (RBI) is working on developing its central bank digital currency (CBDC) and is expected to launch a pilot program for the digital rupee on November 1st.