Sources said the government is considering taxing cryptocurrencies like bitcoin at par with casinos, lotteries, betting and racecourses.
The Goods and Services Tax (GST) Council, the apex decision-making body on indirect taxes, is considering levying 28 per cent GST on cryptocurrencies.
According to a media report, the GST Council may discuss the proposal to tax cryptocurrencies in the upcoming meeting. The date of the meeting has not yet been decided.
The proposed 28 percent GST will be in addition to the 30 percent income tax on income from crypto asset transactions.
In the Union Budget 2022-23, Finance Minister Nirmala Sitharaman proposed a 30 percent tax on income from transfer of virtual digital assets. The new rules have come into effect from April 1.
According to the new rules, profits from all virtual digital assets, including cryptocurrencies, will be taxed at 30 percent.
Gains from virtual digital assets including cryptocurrencies are taxable even if the total income of the taxpayer is less than the limit of Rs 2.5 lakh.
With the imposition of 28 per cent GST, there will be a heavy tax on cryptocurrencies. This would bring cryptocurrency on par with casinos, betting and lotteries as far as the level of taxation is concerned.