Rajkotupdates.news : government may consider levying TDS TCS on cryptocurrency trading – Recently, it has reported that, in the upcoming budget, the government may consider to impose TDS (Tax Deducted at Source)/TCS (Tax Collected at Source) on the sales and purchases of Cryptocurrency. In this blog post, you will know the development of this levy on TDS/TCS for cryptocurrency trading in India.
What is Cryptocurrency?
Cryptocurrencies are digital currencies which use cryptography for their security of central banks. Ethereum, Ripple, LiteCoin and Bitcoin are cryptocurrencies available in the market. In some countries, these are fully functional while in others like India are taking precautions.
One important concern of the Indian government about cryptocurrencies is their concern for tax evasion and money laundering. Cryptocurrencies are operating outside the banking system of India, so it is difficult for the government to monitor effectively. And their decentralized nature can make them perform illegal activities like terrorism financing and drug trafficking.
What are TDS and TCS?
TDS (Tax Deducted at Source) and TCS (Tax Collected at Source) are two forms of indirect taxes debited or credited at the source of income.
Why is the Government considering levying TDS and TCS on cryptocurrency trading?
In the recent report – “rajkotupdates.news : government may consider levying tds tcs on cryptocurrency trading”, the indian government is trying to impose TDS and TCS on cryptocurrency trading in their country to address grave concerns like drug trafficking and terrorism financing. By imposing these taxes on cryptocurrency, the government will ensure tracking safe transactions and identifying any kind of these illegal actions.
This Indian government move is a good step toward accountability to the crypto market. However, it remains to be seen when and how this decision will be implemented by the Indian Government. This big step can lead the crypto market to more regulation of the sector.
What problems does the Indian Government have to face during implementing taxes on cryptocurrency trading?
Rajkotupdates.news : government may consider levying TDS TCS on cryptocurrency trading – Implementing TDS and TCS on cryptocurrency also brought problems for the government. One biggest problem is to identify the source of income for transactions as they are not monitored by Indian centralized authority. Another challenge is that cryptocurrencies exchanges are not regulated in India that make it difficult for centralized authorities to monitor these exchanges.
Future of Digital Currency
The decision made by the government for imposing TDS and TCS on cryptocurrency could be proved as accepting currency in their country. It is unclear about how it could be regulated.
FAQs
What are tax collection methods for crypto trading?
TDS ( Tax Deducted at Source) and TCS (Tax Collected at Source) are two methods for tax collection from investors and traders of cryptocurrency which the Indian government plans to implement.
Is TDS and TCS implementation really impacts cryptocurrency trading in India?
Yes, TDS and TCS on cryptocurrency trading can increase tax burden for investors and traders in India. It will also hinder new traders as well as investors in the digital currency market due to the high burden of taxes.
Is cryptocurrency legal in India?
No, the use of cryptocurrency is not totally prohibited in India. However it can lead to illegal activities like drug trafficking and terrorism financing due to its decentralized nature.
Conclusion
Rajkotupdates.news : government may consider levying TDS TCS on cryptocurrency trading – The Indian government has proposed to impose taxes (TDS and TCS) on cryptocurrency trading is an important development towards cryptocurrency in the country. However, it will raise the tax burden on investors and traders.
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