The country’s tax authority is tracking investors who are receiving income amid the continuing rise in bitcoin prices and are ready to demand taxes. Some experts are expecting a 30% tax on profits from cryptocurrencies and advise their clients to submit bitcoin income as capital gains that are associated with stocks.
The tax authority has not yet classified cryptocurrency revenues in any particular category. Currently, if an investor files an income tax return, the amount of income earned from investing in cryptocurrencies is highlighted under “Income from other sources”.
Clarity about taxes and regulations can attract more investors. Although the Indian government does not consider Bitcoin to be legal tender, holding cryptocurrencies is not illegal or prohibited. Back in September, the government was pondering a new law banning cryptocurrency trading. However, according to the think tank, it would be better for the government to legalize bitcoin by regulating it like corporate stock.