Rajkotupdates.news recently reported that the Indian government is considering levying TDS TCS (Tax Deducted at Source and Tax Collected at Source) on cryptocurrency trading. This move by the government is aimed at regulating and monitoring the rapidly growing cryptocurrency market in India. In this blog post, we will discuss what TDS TCS is, the current state of cryptocurrency trading in India, the government’s stance on cryptocurrency, and why the government is considering levying TDS TCS on cryptocurrency trading.
What is TDS TCS?
TDS and TCS are forms of taxation in India that are used to collect taxes at the source of income. TDS (Tax Deducted at Source) is the tax deducted by the payer while making a payment to the payee, while TCS (Tax Collected at Source) is the tax collected by the seller while making a sale. These taxes are collected by the government as a form of advance tax and are deducted or collected at the time of the transaction.
Cryptocurrency Trading in India
Cryptocurrency trading in India has seen a significant surge in popularity in recent years. According to a report by CoinMarketCap, the total cryptocurrency market capitalization in India is currently over $10 billion. However, the government has been skeptical about the use of cryptocurrencies due to their association with illegal activities, such as money laundering and terrorist financing.
Government’s stance on Cryptocurrency
The Indian government has been cautious about the use of cryptocurrencies and has taken several steps to regulate the market. In April 2018, the Reserve Bank of India (RBI) banned regulated financial institutions from dealing with cryptocurrencies. However, the Supreme Court of India overturned this ban in March 2020, allowing individuals to trade cryptocurrencies through banks or other financial institutions. The government has also introduced the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, which seeks to ban all private cryptocurrencies in India and create a framework for the creation of an official digital currency issued by the Reserve Bank of India.
Why is the Government considering levying TDS TCS on Cryptocurrency trading?
The government is considering levying TDS TCS on cryptocurrency trading as a way to regulate and monitor the market. The government has stated that the move will help to curb money laundering and tax evasion in the cryptocurrency market. The government has also stated that the move will help to bring transparency and accountability to the market, which will make it easier for the government to track illegal activities.
The Indian government’s decision to consider levying TDS TCS on cryptocurrency trading is a step towards regulating and monitoring the rapidly growing cryptocurrency market in India. While the move may be seen as a hindrance to the growth of the market, it is essential to keep in mind that the government’s priority is to curb illegal activities associated with cryptocurrencies. The move will also bring transparency and accountability to the market, making it easier for the government to track and regulate the market. Overall, this move by the government can be seen as a positive step towards creating a safe and secure environment for cryptocurrency trading in India.