December 8, 2023

Indian cryptocurrency exchanges ask RBI to clarify cryptocurrency taxation

Several Indian cryptocurrency exchanges have written a letter to the Reserve Bank of India (RBI) askingclarify the taxation of cryptocurrencies in the country.

As the local edition of India Times reports, in itsThe exchange's circulation highlighted the lack of regulatory transparency when working with cryptocurrencies. For this reason, many local banks still refuse to provide services to digital asset companies.

Indian exchanges are asking for clarification of how they willtheir operations are classified as working with goods, currencies or providing services. Exchanges are also asked to clarify whether these operations are taxed in accordance with the local Tax Act (GST).

Belfrics Global Exchange CEO Praveenkumar Vijayakuma said:

“If working with digital assets is notan exception to the rule, then cryptocurrency exchanges will have a confrontation with tax authorities. Given the recent ruling of the Supreme Court of India, we turned to RBI to clarify the taxation, because if we are required to pay tax on the full amount of the transaction, then most exchanges in India will not survive. ”

Recently, co-founder and CEO of onefrom the popular Indian cryptocurrency exchanges Unocoin, Sathvik Vishwanath said that Indian citizens rarely use cryptocurrencies. Although the country's population is 17% of the global total, India represents only 1% in terms of cryptocurrency transactions. According to Vishwanath, the country will need 12 to 24 months to increase trading volumes.

Let us recall that the Central Bank of India banned the provision of banking services to cryptocurrency companies at the beginning of 2018, but not so long ago the Supreme Court of the country decided to lift the ban.