0

Find out what this means for investors

Share

[ad_1]

Cryptocurrency under GST: The government is working to place cryptocurrencies within the scope of the Goods and Services Tax (GST) in order to tax the full value of transactions. Currently, Cryptocurrency Exchanges are taxed at 18 percent GST on services provided to users under the financial services category.

GST officers see cryptocurrencies, by their nature, as similar to lotteries, casinos, betting, gambling and horse racing, which hold 28 percent of the GST on the total value. Besides, Goods and Services Tax of 3 per cent is levied on the value of the entire transaction in the case of gold.

“There is a need for clarification on the Goods and Services Tax (GST) tax on cryptocurrencies and whether it should be levied on the whole value, we are seeing whether cryptocurrencies can be classified as goods or services and also remove any doubt about whether they can be considered Only after the classification is made, the GST rate on cryptocurrencies will be determined, one of the officials told PTI.

What happens if cryptocurrency is introduced under GST?

Another official said that if the GST is imposed on the full value of cryptocurrency transactions, the rate could be in the ballpark of 0.1 to 1 percent. The tax rate, whether it is 0.1 percent or 1 percent, is still up for debate. First, a decision has been made on the classification of the asset, and then the tariff will be discussed,” another official said.

Since there is no clear definition of cryptocurrencies in the Goods and Services Tax (GST) Act, and because there is no law governing these virtual digital currencies, the classification must take into account whether the legal framework qualifies them as an enforceable claim. An enforceable claim is one that a creditor can make for any type of debt that is not secured by a mortgage on the immovable property.

Losses in one crypto asset cannot be offset against another

In the Union Budget 2022-23, the government has proposed that the transfer of any virtual asset/cryptocurrency be taxed at 30 percent. No deduction will be allowed except for the acquisition cost and no carry forward of any transaction loss will be allowed.

Today, in a major shake-up for the crypto industry, the government made it clear on Monday that in accordance with its 2022 budget proposals, investors will not be allowed to offset losses in one crypto asset against another. Furthermore, mining infrastructure will not qualify for the deduction as a purchase cost.

Besides the 30 percent tax, the Union Budget 2022-23 also proposed a 1% tax refund on the transfer of these assets. Tax experts are divided over whether investors can incur losses in one cryptocurrency against another crypto asset. Offsetting of losses means adjusting losses against the profit or income of that particular year. This provision is available on equity investments.

Minister of State for Finance Pankaj Chaudhary informed the Lok Sabha on Monday, “As per the provisions of Proposed Section 115BBH of the Income Tax Act 1961 (the Act), no loss of VDA transfer will be permitted against income generated by another VDA transfer.” He was responding to queries raised by Lok Sabha member Karti Chidambaram regarding the state of the cryptocurrency.

Read all files latest news And the Breaking news And the Ukrainian-Russian War Live Updates over here.

[ad_2]

Source link