India Ready With Consultation Paper on Cryptocurrencies: Report

Seth said there needed to be a global consensus reached on cryptocurrencies and India would look at regulations enforced in other countries before deciding how it would regulate.

India has levied tax gains made through cryptocurrency investments at 30% but the country has still not given the measure legal status. Additionally, the 30% tax on income from these transactions also includes a 1% deduction at source.

The country’s goods and services tax (GST) council is also mulling a 28% tax on cryptocurrencies, at par with the current GST on casinos, betting, and lottery. Services such as crypto mining along with sales and purchases are likely to attract the 28% GST if the proposal goes through in the next GST meeting, reports stated. The 28% GST will be in addition to the 30% income tax on earnings from crypto-asset transactions. Gifts in crypto and digital assets are also taxed.

Meanwhile, the governor of India's central bank, (RBI), Shaktikanta Das recently cautioned against the use of cryptocurrencies in India saying it could impact the financial stability of the country. More recently, RBI officials have cautioned that the use of cryptocurrencies that are based on the US Dollar could lead to the ‘dollarisation’ of India’s economy.