Know rajkotupdates.news : government may consider levying tds tcs on cryptocurrency trading
rajkotupdates.news : government may consider levying tds tcs on cryptocurrency trading
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What is Cryptocurrency Trading?
Cryptocurrency are digital currencies that use cryptography for security and operate independently of central banks. Bitcoin, Ethereum, Ripple, and Lite Coin are some of the popular cryptocurrencies in the market. However, while some countries have adopted them fully, others, including India, have taken a cautious approach.
Cryptocurrency trading speculates price movements via a CFD trading account or buys and sells the underlying coins via an exchange. When you buy cryptocurrencies via a business, you’ll need to create an exchange account, put up the total value of the asset to open a position, and store the tokens in your wallet until you’re ready to sell.
About TDS and TCS – rajkotupdates.news : government may consider levying tds tcs on cryptocurrency trading
TDS, Tax deducted at source is for a person (deductor) liable to make payment of specified nature to any other person (deductee) who shall deduct Tax at source and remit the same into the account of the Central Government.
TCS, Tax collected at source, is levied by the government on specified transactions to collect Tax, a seller selling a particular item has to collect Tax from the buyer at a fixed rate and deposit it with the government.
The Indian government is reportedly considering imposing TDS and TCS on cryptocurrency trading to address these concerns. By assessing TDS and TCS on cryptocurrency trading, the government aims to ensure that taxes are chargeable on the income generated from these transactions. It will also help in tracking cryptocurrency transactions and identifying any illegal activities.
Know about Rajkotupdates.news : government may consider levying tds tcs on cryptocurrency trading
Cryptocurrencies have recently gained immense popularity as an investment option and medium of exchange. However, the Indian government has hesitated to fully accept them as a legal currency due to various concerns, including money laundering and tax evasion. Recently, there was a report that the government may consider imposing TDS (Tax Deducted at Source) and TCS (Tax Collected at Source) on cryptocurrency trading.
Cryptocurrency trading is to bring more transparency and accountability to the crypto market. In this article, we will explore this development in detail.
As per Rajkotupdates.news, One of the primary concerns of the Indian government regarding cryptocurrencies is their potential for money laundering and tax evasion. Because cryptocurrencies operate outside the traditional banking system, governments cannot effectively monitor and regulate them. Additionally, their decentralized nature makes them an attractive option for illegal activities such as drug trafficking and terrorism financing.
Key points discussed by Arvind Srivatsan
The government may consider levying TDS/TCS on selling and purchasing cryptocurrencies in the upcoming budget. As per Arvind Srivatsan, some of the key points are below:
- Transactions above a specific limit should be under the purview of specified transactions to report to income tax authorities. By dealing in cryptocurrencies, we expect the government to introduce a regressive tax system.
- Considering the market size, the amount involved, and the risk with cryptocurrencies, some changes are necessary to tax cryptocurrencies.
- Cryptocurrencies must be sold and purchased by reporting them in the Statement of Financial Transactions (SFT).
- He said trading firms already report for the sale and purchase of shares and units of mutual funds.
- To keep track of high-value transactions done by the taxpayer, the Income Tax Act has the concept of SFT or Reportable Account.
- It helps the tax authorities to collect information about certain defined high-value transactions carried out by any person during the year.
- Financial institutions, companies, and stock market intermediaries come under the purview of SFT reporting.
- A higher tax rate of 30 percent should be on income from the sale of cryptocurrencies, such as winnings from lotteries, game shows, puzzles, etc.
Impact of TDS and TCS : rajkotupdates.news : government may consider levying tds tcs on cryptocurrency trading
The proposed TDS and TCS on cryptocurrency trading will significantly impact traders and investors in India. Firstly, it will increase their tax compliance burden, as they now have to account for taxes on their cryptocurrency income. Additionally, it may deter new traders and investors from entering the market due to the additional tax burden. However, it may also bring more legitimacy to the market, as it will be subject to the same tax laws as other investments.
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The Indian government’s move to impose TDS and TCS on cryptocurrency trading develops the country’s approach toward cryptocurrencies. While this may increase the tax compliance burden on traders and investors, it may also bring more legitimacy to the market. However, implementing these taxes may not be without challenges, and governments will need to find a way to regulate and monitor cryptocurrency exchanges effectively.
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