Indian government is telling that the bitcoin and other cryptocurrency are ponzi scheme. if its so then why the government is not banning it. It is repeatedly warning the its citizens not to invest in it, as it carries the uninvited risk. In India Bitcoin is going to be taxable in 2018, this may happen in this budget session.
5 Bitcoin facts of Indian government : –
- Indian government is still undecided whether it’s a goods, services or currency.
- This shows that the Indian government is confused over this.
- government confusion is all about the acceptance of the currency. i.e. it is still in dilemma whether to accept the cryptocurrency or not if yes than in which mode.
- This is vital because on the basis of this classification it can take taxes
In India if Bitcoin is considered as :
– Currency :- there will be no tax applicability
– Service :- 12% of GST applicable
– Goods :- 18% GST applicable
Bitcoin Vs share /stock tax implication
Currently the taxability of bitcoin is similar to the stock . the current taxability of stock are ;If anybody holds the Bitcoin (stock) for more than or equal to 36 months than it shall be considered as long term investment thus it will be considered as long term asset.
Similarly if a person holds a bitcoin (stock) for less than or is equal to 36 month than it shall be considered as short term asset.
Another point is gain from selling of any products/stocks shall be levied a particular tax slab and it shall include
surcharge and education cess.
Cryptocurrency and tax implication in other counties
In USA cryptocurrency is considered as an individual property that is how it is different in taxation as far as India is concerned.
It means if a person holds a bitcoin or any cryptocurrency in USA then the tax rates will be as follows ; 0% , 15%, 20% depending on the holding of the cryptocurrency and the time frame of the holdings .
Currently USA is already discussing on an act to pass. Cryptocurrency fairness in taxation Act. (CFTA) Is being debated in congress. The notable point is that when the Indian government is still reading and trying to understand what the hell is cryptocurrency.
Western countries have already moved one step forward and some countries has started levy tax while some are in the process of passing a new act on it.
In USA there is a bid to exempt all cryptocurrency transactions below $600 from taxation.
In UK tax on bitcoin was repealed in 2014 . Most cryptocurrency transactions were exempted from VAT .i.e value added tax is not levied on any transactions. Most important rule in UK is that there is a standard rate of flat 20% for mining cryptocurrencies. It means if you are in UK and are being involved in mining of any cryptocurrency then flat 20% will be imposed.
In GERMANY no VAT on cryptocurrency transactions.
In japan Bitcoin is considered a commodity apart from this it removed consumption tax of 8% on 1st july 2017. Now users pay cryptocurrency tax as a standard rate of tax, capital gain tax , company tax as the case may be.
In Singapore the bitcoin is considered as a goods an not a currency hence imposing a flat rate of 7% tax on bitcoin transaction.
It is the first decentralized currency introduced ever on the planet Earth. The system works without a central repository or single administrator. While cash is deposited in a bank and being regulated by the central bank of the particular country. The bitcoin is created and stored electronically . first of all it was introduced in 2009 to the world.