Budget 2018: With the Budget 2018 round the corner, all eyes are on Finance Minister Arun Jaitley as he is going to present the Union Budget on February 1. Everyone has expectation from him. So, some clarity is also needed regarding the taxability of Bitcoins in India.
Budget 2018: With the Budget 2018 round the corner, all eyes are on Finance Minister Arun Jaitley as he is going to present the Union Budget on February 1. Everyone has expectation from him. So, some clarity is also needed regarding the taxability of Bitcoins in India. Cryptocurrency was the flavour of the season in 2017. Even though the digital currency may have plunged in the first month of the new year, its craze among investors hasn’t waned. This has even put the International Monetary Fund (IMF) in a tizzy. Now even the International Monetary Fund is calling for ‘global coordination’ on cryptocurrencies as it warns of the risks from surging prices. Confusion still prevails in the minds of investors on how income tax would be levied on the gains arising from Bitcoins. “People don’t mind paying taxes, but at least there should be clarity from the government about how they intent to tax the Bitcoin income,” says Karan Batra, Founder & CEO of CharteredClub.com. “The RBI does not treat Bitcoins as a legal currency in India. As it is not a currency, it should be considered as goods and GST be levied at 12%, or it should be considered as a service and GST be levied @18%. Currently, people are not paying GST on Bitcoins, but the government is working on it and a clarity, if given by FM Arun Jaitley about the same in the Budget 2018, would clear the air about the taxability of Bitcoins in India,” he adds. It would be interesting to see if bitcoin gets taxed in Budget 2018-19.
“We do not advise to trust this concept as there is no logical fundamental behind this. It is a pure speculation. Even in India it is not classified whether its a commodity or an asset or a security. There are some reports that Indians are contributing 10% of the total Bitcoin trade Globally. Finance Minister Arun Jaitley need to clarify in the budget and yes it should be taxed like other speculative class to check its trade,” says Vivek Mittal, Research Head (Equities), Corporate Scan. Bitcoin is just a speculative bet and its craze will die down soon, says Asif Iqbal of Escorts Securities. “This is more hype. It does not fulfill the requirement of money. It is just speculative bet. Can Bitcoin be used as Medium of exchange freel?. I don’t think so. Can Bitcoin serve as a store of value? This is not true in this case as there is wide volatility. We feel Finance Minister Arun Jaitley should leave Bitcoin in Budget 2018. It will die its own death or we see some form of more organised, regularised stable currency in the coming decade,” says Asif Iqbal.
Watch video: Watch video: 5 Blockbuster Income Tax Moves Common Man Can Expect
Meanwhile to regulate the trade of cryptocurrencies such as Bitcoins, the government has formed a committee to fast-track the process and form a law for the same. This step follows the Indian authorities’ apprehension that black money is being used to trade in cryptocurrencies. The committee has representation from the departments of economic affairs, tax and from the RBI and the ED. Experts say Indians form around 10% of the total global trade in Bitcoin. Finance Minister Arun Jaitley had clarified that Bitcoin is not a legal tender in the country. The government on December 29 had cautioned investors to be wary of virtual currencies like Bitcoin, saying they are like Ponzi schemes with no legal tender and protection. It is still to be seen if bitcoin gets taxed in Budget 2018-19.