India is practicing a bolder attitude towards foreign crypto exchanges and will exercise a strict tax payment policy where there might be an additional 18% tax to be levied on foreign crypto exchanges that have been operating in India. This new policy of taxation can be indicative of a more tolerant outlook of India towards cryptocurrency proceedings in general.
At present, there has been no such issue or guideline under which exchanges were liable to pay taxes to continue with work procedures, however, the new policy is subjective for these financial exchanges to pay tax with an approx 18% charge to the Government to run their significant proceedings in the Indian subcontinent .
Overseas Crypto Exchanges Subjected to 18% Tax in India
The foreign exchanges will be segregated under the new online data service providers and will be allowed to pay GST under the same category. The tax department of India is considering categorizing crypto exchanges under online information database access and retrieval (OIDAR) through which businesses can easily designate a specialized team that will be responsible to pay taxes on time.
According to the sources available, there was no such policy where the exchanges were liable to pay taxes, but now under new Government guidelines, foreign exchanges will have to pay the taxes to continue with their crypto agreements in India.
Earlier there have been many speculations in the media asserting a more rigorous stance of India on crypto transactions stating the condition might alter into an outright ban on crypto. Reserve Bank of India as well had shown a reluctant attitude in adopting cryptocurrency due to its speculative nature. This can also pose certain issues for local exchanges who might struggle to find appropriate banks to support them in their crypto endeavors.
Amidst such growing concerns surrounding crypto, this new taxation policy of India can be deemed as quite lenient towards adopting cryptocurrency as a legitimate virtual asset and providing new financial avenues in the country’s economic spectrum.
Juhi Mirza is an archaeological major who is obsessive about blockchain/Crypto technology and deems it to be the foundational philosophy of the future. Her dogged ability to research and crystallise technical facts/multiple perspectives into rivetting stories makes her an accessible finance writer. She tends to her archaeological pursuits and loves unearthing the past over the weekends.