Rajkotupdates.news recently reported that the Indian government may consider levying TDS/TCS on cryptocurrency trading in the upcoming financial year. This move is part of the government’s efforts to regulate the cryptocurrency market in India.
Cryptocurrency has gained immense popularity in recent years, with many people investing in it as a way to earn profits. However, the lack of regulation has made the cryptocurrency market in India a risky venture. The Indian government has been working to regulate the market and ensure that investors are protected.
One of the ways the government plans to regulate the market is by introducing TDS/TCS on cryptocurrency trading. TDS (Tax Deducted at Source) and TCS (Tax Collected at Source) are taxes that are collected by the government at the source of income. In the case of cryptocurrency trading, TDS/TCS would be collected by the exchange or platform where the trading takes place.
The purpose of levying TDS/TCS on cryptocurrency trading is to ensure that taxes are paid on profits earned from trading. Currently, cryptocurrency trading falls under the purview of capital gains tax. However, many traders do not declare their profits, leading to a loss of revenue for the government.
By introducing TDS/TCS, the government can ensure that taxes are collected at the source and that traders cannot evade taxes. This move will also make cryptocurrency trading more transparent and secure for investors.
However, the proposal to introduce TDS/TCS on cryptocurrency trading has received mixed reactions from the industry. Some experts believe that the move will help regulate the market and protect investors. Others are concerned that it will lead to a decrease in trading activity and discourage investors.
The Indian government has been taking steps to regulate the cryptocurrency market in India for several years. In 2018, the Reserve Bank of India (RBI) issued a circular banning banks from dealing with cryptocurrency exchanges. However, the Supreme Court of India overturned the ban in 2020, allowing cryptocurrency trading to resume.
Since then, the government has been working on a regulatory framework for cryptocurrency trading. In 2019, a government panel recommended a ban on all private cryptocurrencies in India. However, the panel also recommended the introduction of a government-backed digital currency.
The proposed TDS/TCS on cryptocurrency trading is just one of the measures being considered by the government to regulate the market. Other measures being considered include mandatory KYC (Know Your Customer) verification, licensing requirements for exchanges, and a framework for taxation.
In conclusion, the proposal to introduce TDS/TCS on cryptocurrency trading is a step towards regulating the cryptocurrency market in India. It will ensure that taxes are paid on profits earned from trading and make the market more transparent and secure for investors. However, the move has received mixed reactions from the industry, and it remains to be seen how it will impact the cryptocurrency market in India.