Trading on crypto exchanges based out of India may get more expensive as the country’s regulator pondering over a 2% equalization tax on crypto dealings.
The new equalization tax – a levy that the nation charge on foreign companies – would apply to other cryptocurrencies and Bitcoin purchased off exchanges that are based out of India. As per a report, the tax department is now mulling whether the two percent tax is applicable on crypto-assets purchased online from overseas exchanges by Indians. It is uncertain why crypto traders will be affected by this.
However, this doesn’t shed light on why a tax intended for firms will mean for crypto holders. It is also uncertain as to whether crypto can be classified as services, goods or commodities.
As of now, people in India don’t pay tax on incomes from crypto dealings unless they’ve transformed Ethers, Bitcoins and respective tokens into the Indian rupee.
Often referred to as the ‘Google Tax’, the equalization levy was initially directed towards foreign companies carrying out business in India but not paying their equivalent share of taxes because their headquarters weren’t local.
There has been strong opposition by tech giants like Twitter and Google, which may have to pay as much as 25% more tax in India. Some have also claimed that the tax could be against international trade laws.