The government is planning to put cryptocurrency under the ambit of Goods and Services tax (GST) with levying a one percent tax collected at source (TCS) on them.
According to a Business Standard report, the tax collected at source by such platforms could be set off against investors’ tax liability, also, these exchanges may have to get themselves registered under the GST.
Further, the report adds that the central government may classify cryptocurrency exchanges into three categories – the platforms that act as a facilitator, the brokerages that allow buying and selling, and the trading platforms that provide an interface for trading.
The proposed move is aimed at monitoring virtual currency transactions. As the Centre is planning to roll out regulations on crypto investments to protect investors instead of banning them. Meanwhile, the government is also mulling treating the use of blockchain technology as export and gradually bringing down the tax on it.
Recently, a report had stated that the government is unlikely to make crypto as currency to settle transactions and make payments. However, cryptocurrency could be held as an asset like shares, gold or bonds.