How much GST will be levied on Cryptocurrency?

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In India, more than 20 million people are investing or trading their money in crypto. On the other hand, if we talk about the total value, then Indians hold about $ 5.3 billion in cryptocurrency. Youth and women have also invested a lot of money in cryptocurrency. In such a situation, new rules on cryptocurrency being brought by the government are shocking us.

From April last month, the government has started charging a hefty tax of 30 per cent and TDS of one per cent on the earnings of cryptocurrency. In such a situation, according to sources, new news is coming, and GST on cryptocurrency is shocking us even more. Due to this investing in crypto is becoming difficult and at the same time crypto is also very risky.

So in this post let us clear the answers to all those crypto-related questions which are arising in our minds? Like is cryptocurrency legal in India, how much per cent tax is already levied on cryptocurrency earnings in India, will there be GST on cryptocurrency and is earning cryptocurrency like the lottery?

Is Cryptocurrency Legal in India?

Before knowing whether a cryptocurrency 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 charging 30% tax on cryptocurrency earnings since April this month. But he has clearly stated that taking tax does not mean that cryptocurrency is 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 it has not been given legal status yet. You can trade or invest in it at your own risk.

What is the percentage tax on cryptocurrency earnings in India?

The government has already imposed two types of taxes on crypto. The government has started charging 30% tax on the earnings of cryptocurrency in India from April last month. Simultaneously, TDS of 1% is also being taken. So let us understand both the taxes with an example. First we will understand the rule of 30 percent tax, then the rule of one percent TDS.

Rule of 30% Tax:

For example, you will have to pay a tax of 30% on the profit of any cryptocurrency or NFT you sold. Let us understand from the example that you bought crypto or NFT for ₹ 1,00,000 and you sold it for ₹ 1,20,000. So here you get a profit of ₹ 20,000. But this Rs 20,000 is not your entirety. Here you will have to pay 30% tax on your profit to the government.

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

One percent TDS rule

This one percent TDS will be deducted to you on every cryptocurrency transaction. Whenever you sell cryptocurrency or transfer it to any relative friends, family, your TDS of 1% will be deducted. TDS of 1% will be deducted on both profit and loss. The platform or app through which you will be selling cryptocurrency, at the same time tax of one percent will be charged from you.

So let’s understand with example. Let’s say we bought bitcoin for ₹ 1,00,000 and sold it for ₹ 1,00,000 only. So at the time of selling your Rs 1,00,000 will be deducted as 1% tax. That is, ₹ 1,000 will go to our tax. And you will be left with ₹99,000. However, you can set off the loss due to TDS with income tax at the end of the year.

So in addition to these two taxes, the government is also going to impose GST tax on crypto. So let us understand in the next section that when will the GST tax on crypto be applicable, what are the chances, what percentage of GST will be applicable.

Will there be GST on cryptocurrencies in India?

According to sources, the GST Council is going to levy 28% GST (GST) on income from transactions of cryptocurrency or NFTs. The government has not imposed GST tax on any crypto yet. But there is a possibility that after the next financial meeting, there will be a GST tax on crypto as well. This 28% GST tax will be in addition to 30% tax on your cryptocurrency and 1% TDS.

That is, if the government imposes GST on cryptocurrency, then you will have to pay three types of taxes. The first is 30 percent tax, second one percent TDS (TDS) and third 28 percent GST. Your tax of 30 percent and GST of 28 percent is going to be levied on the earnings, the same TDS of 1% will be applicable to you on every transaction. If we talk about, then the next meeting of the GST Council is expected to be held in May this month itself.

Is Crypto Currency Earning Like a Lottery?

If the Indian government implements GST on cryptocurrency earnings, then cryptocurrency earnings will also be like lottery. Because at present, there is 28% GST along with 30% tax on casinos, betting, lotteries.

In this way, the earnings from digital assets such as cryptocurrencies, NFTs will also be like lottery. Because the government is already charging 30 percent tax and one percent TDS on digital assets and cryptocurrency earnings and there is a possibility that it may start charging additional GST of 28 percent.

I hope you liked this post. Along with this, all your crypto related questions like whether crypto currency will attract GST or not, what percent GST will be applicable on cryptocurrency, how much percent tax is already being imposed on cryptocurrency, is cryptocurrency legal in India, you must have got the answer. Through this post, we have cleared all the small things.

So that you do not have any doubts. Simultaneously, let us tell you that cryptocurrency is still not regulated in India. Yes, cryptocurrencies are being taxed. Finance Minister Nirmala Sitharaman, who visited the US last month, said that right now the Indian government wants to study the advantages and disadvantages of cryptocurrency more closely. So that any kind of money laundering and terror funding etc. can be prevented due to cryptocurrency.

Along with this, the Finance Minister also talked about a global regulation, now only the coming days will tell what will happen to the cryptocurrency. But it is clear that the acceptance of cryptocurrencies and digital assets is increasing rapidly. People are adopting it fast because cryptocurrency is based on high security technology like blockchain.

Bonus: IOSCO is an international organization, its chairman Ashley Alder has said in a news report that maybe. It may be next year that all cryptocurrencies should be regulated so that such a decline is not seen in the market and scams with people can be reduced.

Here it is told that in India How much GST is applicable on Cryptocurrency? Because some time ago it has been told in the Union Bill that from now on all digital coins will be taxed and now it has been implemented on all digital coins. In such a situation, if you are thinking of investing money in any digital currency, then definitely read this.