The Indian government is mulling the taxation of cryptocurrencies as business income, in a decision which could double the tax burden on investors, according to a local report.
Fast facts
Currently, crypto earnings are taxed as capital gains, which stand at 20%, while business income rates reach as high as 42%.
Taxing each crypto transaction rather than a single levy upon liquidation of assets is also under consideration, according to two senior tax advisors involved in government discussions cited by the Economic Times.
Additionally, India may levy an 18% Goods and Services Tax (GST) on crypto investors themselves, if exchanges pass on this tax burden.
The government, which currently does not collect data from crypto investors, may also amend the Income Tax Act to mandate crypto gains disclosures.
Tax authorities recovered around US$9.3 million from Indian crypto exchanges for alleged tax evasion last week, to which some exchanges blamed the ambiguities in existing tax laws.
Crypto tax implications are expected to be on the table in the upcoming February budget session.
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