India looks to tax cryptocurrency exchanges and trades – report

The authorities in India are considering taxing cryptocurrency trades and ecosystem in the country, news website ET Now reported on Monday, citing its sources.

According to people familiar with the matter, the government feels that an activity that generates income should be taxed. The country’s tax department favors taxing cryptocurrency exchange and trades, but that doesn’t mean that they would be categorized as a valid asset class, the media said.

Former Reserve Bank of India Governor Rama Subramaniam Gandhi said last week that cryptocurrencies must be regulated as an asset or commodity in India and governed by existing laws. He added that regulators should be aware of an individual’s crypto investments from a tax perspective and that such information should be shared with exchanges.

A recent study from market research firm Finder showed India ranked second in the world in terms of crypto adoption, with 30% of individuals polled saying they hold cryptocurrencies.

According to the report, in India, bitcoin is the most popular coin to own (16%), followed by ripple (8%), ethereum (6%) and bitcoin cash (6%). Despite the steps taken by the Indian government to severely restrict digital assets, cryptocurrency investments in the country increased from $923 million in April 2020 to almost $6.6 billion by May 2021.

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