Cryptocurrency trading is now a popular alternative to buying coins outright. While some might argue that the cryptocurrency market tends to be relatively new, it boasts a higher level of volatility thanks to the enormous amounts of short-term speculative interest. This is among the main reasons why this market remains exciting.
While cryptocurrency helps reshape the financial world for the better, it seems to attract attention from all corners. As per the Rajkotupdates.news: Government May Consider Levying TDS TCS on Cryptocurrency Trading posts, traders and investors in the country should now be ready to pay taxes.
The government plans to levy Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) taxes on cryptocurrency transactions. It comes at a time when the Indian government is still contemplating the legal status of cryptocurrencies in the country.
As a quick reminder, the Supreme Court of India removed the RBI’s ban on cryptocurrencies in March 2020. That explains the legality of crypto trading and exchange in the country.
If you’re still on the fence regarding these new changes, don’t worry. We’re here to take you through a few things you need to know regarding TDS and TCS implementation’s impact on cryptocurrency trading in India.
Reasons for Introducing TDS and TCS on Cryptocurrency Trading
Reading Rajkotupdates.news: Government May Consider Levying TDS TCS on Cryptocurrency Trading latest post, it’s easy to wonder about its reasoning. In a nutshell, the moves are part of the government’s scheme to regulate the crypto market and reduce tax evasion cases.
With the introduction of TDS and TCS in crypto trading, the government wants to ensure that investors and traders pay their share of taxes. To date, there is no precise mechanism for collecting taxes on crypto trading in the country. While that sounds appealing to cryptocurrency traders and investors, it results in significant revenue loss to the government.
As per the current speculations, levying TDS and TCS on crypto trading will help the government collect more revenue by sealing the available loopholes. Furthermore, the new changes have the potential to help ensure the government curbs illegal activities in the cryptocurrency market.
Although Rajkotupdates.news: Government May Consider Levying TDS TCS on Cryptocurrency Trading news is attracting numerous opposition, the reason behind this decision is justifiable. But it remains a mystery how the government will implement the measures to help change the cryptocurrency market for the better.
Revelations by Nangia Andersen LLP Tax Leader Aravind Srivatsan
Rajkotupdates.news: Government May Consider Levying TDS TCS on Cryptocurrency Trading post dates back to the revelations by Nangia Andersen LLP Tax Leader Aravind Srivatsan. In the revelations, the essence of levying TDS and TCS on crypto trading is to inform income tax authorities regarding the specified transactions.
Moreover, the government will levy a 30% tax on the income one generates from selling cryptocurrencies, similar to the winnings you earn from lotteries and game shows. That comes at a time when India boasts the highest number of cryptocurrency owners in the world at around 10.07 Crore.
How Implementation of TDS and TDC Taxes on Cryptocurrency Trading Will Work
If the Indian government succeeds in its quest to introduce TDS and TDC taxes on crypto trading, they need a surefire way to make it effective. In a glimpse, this new approach could follow the trend of taxes applied to other financial transactions.
The government deducts Tax Deducted at Source (TDS) from the income individuals or entities earn before receiving it. With crypto trading, the government will deduct TDS tax from the profits traders and investors earn.
On the other hand, the government collects Tax Collected at Source (TCS) from sellers when making a sale. The collection of this income in cryptocurrency trading is not far off since the government will collect it from the purchase of crypto.
For Rajkotupdates. news: Government May Consider Levying TDS TCS on Cryptocurrency Trading reports to pass through, exchanges must register and get a Tax Identification Number (TIN) from the government. Also, they have to record all transactions and correctly file their returns.
For the successful implementation of TDS and TCS in cryptocurrency trading, there needs to be significant coordination between the Indian government and exchanges. If things work out, these changes will help regulate the cryptocurrency industry and increase government revenue.
Challenges in Implementing Cryptocurrency Taxes
While levying TDS and TCS taxes on cryptocurrency trading offers numerous benefits to the government, it won’t happen in a flashlight. After all, the government will first have to overcome the available hurdles to be successful in its quest.
One hurdle the Indian government should overcome first is investing in the technical expertise and infrastructure needed to help make the levying of TDS and TCS taxes on crypto trading successful. After all, the government doesn’t have much of it at its disposal. And considering crypto is decentralized, it might feel like a mammoth task when tracking back the transaction to the source point.
Rajkotupdates.news: Government May Consider Levying TDS TCS on Cryptocurrency Trading news also faces a backlash from traders and investors. Bear in mind cryptocurrency remains a tax-free and independent virtual mode of payment in India. Investors and traders deem it another way for the government to throttle the growth of the cryptocurrency industry and limit individual freedoms.
Rounding Up
The proposal by the Indian government to impose TDS and TCS on cryptocurrency trading is a step in the right direction in the country’s regulatory landscape. While it offers numerous benefits to the cryptocurrency industry, it also has the potential to stifle innovation and growth.
That’s why the government should first factor in the technical repercussions and opposition from cryptocurrency investors & traders before implementing these new changes. Either way, cryptocurrency enthusiasts should prepare themselves for what lies ahead if the government’s proposals do sail through to avoid last-minute surprises.
Fret not since Rajkotupdates.news: Government May Consider Levying TDS TCS on Cryptocurrency Trading post can serve as a good starting point when you want to invest or trade crypto.
