Cryptocurrency gains could attract tax as Centre plans to change income tax laws in upcoming Budget

With the upcoming budget, the Central government could introduce new changes to income tax laws to tax cryptocurrency gains.

New Delhi: The Central government is planning to bring new changes to income tax laws with the Budget 2022. According to Revenue Secretary Tarun Bajaj, the government is mulling changes to bring cryptocurrencies under the tax net. 

Bajaj said that in terms of income tax, some people are already paying capital gains tax on the income from cryptocurrency, and in respect of Goods and Services Tax (GST) also the law is "very clear" that the rate would be applicable as those in case of other services.

"We will take a call. I understand that already people are paying taxes on it. Now that it has really grown a lot, we will see whether we can actually bring in some changes in law positions or not. But that would be a Budget activity. We are already nearing the Budget, we have to look at that point of time," Bajaj told PTI in an interview.

He also cleared if a provision of TCS (Tax collected at Source) could be introduced for crypto trading, and said "if we come up with a new law then we will see what is to be done".

"But yes, if you make money you have to pay taxes... We have already got some taxes, some have treated it as an asset and paid capital gains tax on it," he added.

On the subject of whether people involved in cryptocurrency trading would be categorized as facilitator, brokerage and trading platform and how the taxation would be done under GST, Bajaj said "there would already be such things available in other services also. So whatever GST rate they are taxed at, that will be applicable on them."

"They have to get themselves registered. The GST law is very clear. If there is an activity, if there is a broker who is helping people and charging brokerage fee, GST would get charged," he said.

On Thursday, Prime Minister Narendra Modi urged all democratic nations to work in tandem to ensure that cryptocurrency does not end up in the wrong hands, cautioning that it can spoil the youth. Also Read: Instagram gets rid of Threads app; here’s why

"It is important that all democratic nations work together on this and ensure it does not end up in wrong hands, which can spoil our youth," PM said while referring to cryptocurrency. Also Read: THIS Rs 2 coin can fetch you Rs 5 lakh; here’s how

- With PTI inputs,