rajkotupdates.news : government may consider levying tds tcs on cryptocurrency trading :- Recently, it has been reported that the government may consider imposing TDS (Tax Deducted at Source) and TCS (Tax Collected at Source) on cryptocurrency trading. In this article, we will explore this development in detail and what it means for cryptocurrency traders and investors in India.

Introduction

rajkotupdates.news : government may consider levying tds tcs on cryptocurrency trading :- Cryptocurrencies are digital or virtual currencies that use cryptography for security and operate independently of central banks. Bitcoin, Ethereum, Ripple and Lite Coin are some of the popular cryptocurrencies in the market. While some countries have adopted them fully, others including India have taken a cautious approach.

Main Concern

rajkotupdates.news : government may consider levying tds tcs on cryptocurrency trading :- One of the primary concerns of the Indian government regarding cryptocurrencies is their potential for money laundering and tax evasion. Because cryptocurrencies operate outside the traditional banking system, it is difficult for governments to effectively monitor and regulate them.

Additionally, their decentralized nature makes them an attractive option for illegal activities such as drug trafficking and terrorism financing.

Read More – What is Cryptocurrency?

Why TDS and TCS on Cryptocurrency Trading

rajkotupdates.news : government may consider levying tds tcs on cryptocurrency trading :- The Indian government is reportedly considering imposing TDS and TCS on cryptocurrency trading to address these concerns. TDS is tax deducted at source of income, and TCS is tax collected at source of income. By imposing TDS and TCS on cryptocurrency trading, the government aims to ensure that taxes are paid on the income generated from these transactions. It will also help in tracking cryptocurrency transactions and identifying any illegal activities.

What is TDS & TCS?

TDS stands for Tax Deducted at Source, and TCS stands for Tax Collected at Source. They are forms of indirect taxes that are deducted or collected at the source of income.

Major Impact on Inverters

rajkotupdates.news : government may consider levying tds tcs on cryptocurrency trading :- The proposed TDS and TCS on cryptocurrency trading will have a significant impact on traders and investors in India. Firstly, it will increase the tax compliance burden on them, as they will now have to account for taxes on their cryptocurrency income.

Additionally, it may deter new traders and investors from entering the market due to the additional tax burden. However, it may also bring more legitimacy to the market, as it will be subject to the same tax laws as other investments.

rajkotupdates.news : government may consider levying tds tcs on cryptocurrency trading :- The imposition of TDS and TCS on cryptocurrency trading in India will increase the tax compliance burden on traders and investors. They now have to account for taxes on their cryptocurrency income. Additionally, it may deter new traders and investors from entering the market due to the additional tax burden. However, it may also bring more legitimacy to the market, as it will be subject to the same tax laws as other investments.

Problems During Implementation

rajkotupdates.news : government may consider levying tds tcs on cryptocurrency trading :- The implementation of TDS and TCS on cryptocurrency trading in India will not be without challenges. The biggest challenge will be identifying the source of income for these transactions, as cryptocurrencies are not issued by any centralized authority. Additionally, cryptocurrency exchanges are currently not regulated in India, making it difficult for the government to effectively monitor and regulate them.

rajkotupdates.news : government may consider levying tds tcs on cryptocurrency trading :- It will be a challenge for the government to identify the source of income for cryptocurrency transactions as cryptocurrency is not issued by any centralized authority. However, it may be possible to track transactions through exchanges and wallets.

Future of Digital Currency

rajkotupdates.news : government may consider levying tds tcs on cryptocurrency trading :- The government’s proposed move to levy TDS and TCS on cryptocurrency trading could be a step towards accepting them as a valid form of currency. However, it is still unclear how the government plans to regulate cryptocurrency exchanges and trading in the future. The government may also explore the possibility of launching its own digital currency in the future.

Major Points of Levying TDS, TCS on Cryptocurrency Trading

• The public authority could consider in the impending Financial plan imposing TDS/TCS marked down and acquisition of digital currencies over a specific limit and such exchanges ought to be brought inside the ambit of determined exchange to answer to personal duty specialists, Nangia Andersen LLP Expense Pioneer
• Likewise, a higher duty pace of 30% ought to be imposed on the pay emerging from the offer of digital money, like rewards from lottery, game shows, puzzle, and so on, he said.
• Addressing PTI on what the Financial plan 2022-23, to be revealed by the public authority on February 1, could have coming up for the crypto business in India, Srivatsan said right now, India has the biggest number of crypto proprietors worldwide, at 10.07 crore and according to a report it is normal that the venture by Indians in digital currency could contact USD 241 million by 2030.
• A bill was supposed to be introduced during Winter Meeting of Parliament to control digital currencies. Nonetheless, it was not presented, and it is currently expected that the public authority might take up this bill in the Spending plan Meeting.
• In the event that the public authority doesn’t restrict Indians from managing in digital currencies, we expect that the public authority could present a backward expense system for digital currencies.
• Considering the size of the market, the sum in question, and the gamble combined with digital currencies, certain progressions might be gotten the tax assessment from cryptographic forms of money like bringing them under the arrangements of expense deducted at source (TDS) and charge gathered at source (TCS) over an edge limit which will assist the public authority with getting the “impressions of the financial backers.
• Both deal and acquisition of digital currencies ought to be gotten under the ambit of announcing the Assertion of Monetary Exchanges (SFT). The exchanging organizations as of now do comparable revealing of offer and acquisition of offers and units of common assets. To keep a watch on high worth exchanges embraced by the citizen, the Personal expense regulation has the idea of SFT or reportable record.
• Currently, India has the highest number of crypto owners globally, at 10.07 crore and as per a report it is expected that the investment by Indians in cryptocurrency could touch $241 million by 2030.
• For both transaction sale and purchase of cryptocurrencies should be brought under the ambit of reporting in the Statement of Financial Transactions (SFT).
• To the trading companies already do similar reporting of sale and purchase of shares and units of mutual funds, he said.
• They keep a watch on high value transactions undertaken by the taxpayer, the Income-tax law has the concept of SFT or reportable account.
• To helps tax authorities to collect information on certain prescribed high value transactions undertaken by any person during the year.
•  The Financial institutions, companies and stock market intermediaries fall within the purview of SFT reporting. Srivatsan said similar to winnings from lottery, game shows, puzzle, etc., a higher tax rate of 30 per cent should be levied on the income arising from the sale of cryptocurrency.

Conclusion

rajkotupdates.news : government may consider levying tds tcs on cryptocurrency trading :- The Indian government’s proposed move to impose TDS and TCS on cryptocurrency trading is a significant development in the country’s approach towards cryptocurrencies. While this may increase the tax compliance burden on traders and investors, it may also bring more legitimacy to the market.

However, the implementation of these taxes may not be without challenges, and governments will need to find a way to effectively regulate and monitor cryptocurrency exchanges.

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