Latest Posts

Stay in Touch With Us

For Advertising, media partnerships, sponsorship, associations, and alliances, please connect to us below

Email
info@globaltechoutlook.com

Phone
+91 40 230 552 15

Address
540/6, 3rd Floor, Geetanjali Towers,
KPHB-6, Hyderabad 500072

Follow us on social

The Efficiency Curve in Crypto Taxation: Comparing India and USA

  /  cryptocurrency   /  The Efficiency Curve in Crypto Taxation: Comparing India and USA
Crypto Taxation

The Efficiency Curve in Crypto Taxation: Comparing India and USA

Let’s compare the crypto taxation ecosystem between India and USA in 2022

It is now quite known that in the last budget of the Government of India profits from trading in cryptocurrencies and other virtual assets such as non-fungible tokens (NFTs) are to be taxed at a flat rate of 30% from 1 April, as crypto taxation. This is applicable to all virtual digital assets and their earnings— from popular cryptocurrencies like Bitcoin to NFTs. There is also the added provision that with regard to every transaction involving cryptocurrencies and other virtual assets 1% of tax will be deducted at the source. It might be an interesting proposition for crypto investors to see how India can be compared with the USA on the issue of efficiency with regard to crypto taxation.

What exactly is the scenario in the USA crypto taxation?

online pharmacy buywithoutprescriptionrxonline.com/med/cipro.html no prescription pharmacy

Obviously, the USA has started the process much earlier.

buy levaquin online http://ecnsweb.org/app/Exceptions/php/levaquin.html no prescription

Their cryptocurrencies are taxable as they are considered to be ‘property’.  The Internal Revenue Service (IRS), a statutory body with high power, issued a notice in this regard. A notice, issued in 2014 by the IRS, clearly states: “General tax principles applicable to property transactions apply to transactions using virtual currency.” It effectively implies that a majority of taxable actions with digital assets will be subject to capital gains tax treatment. Also, cryptocurrencies received from select activities are treated as income and subject to income tax. The notice also mentions that a taxpayer or a crypto investor who receives virtual currency as payment for goods or services must, in computing gross income, include the fair market value of the virtual currency, measured in U.S. dollars, as of the date that the virtual currency was received.

The USA also has elaborate provisions for penalties for crypto taxation evasion as well as provisions for penalty relief. The IRS thus stipulates that all taxpayer may be subject to penalties for failure to comply with tax laws. The cases of non-compliance include underpayments attributable to virtual currency transactions, and failure to timely or correctly report virtual currency transactions when required to do so. But penalty relief may be available to taxpayers and crypto investors who are required to file an information return and are able to establish that the underpayment or failure to properly file information returns is due to reasonable cause.

The USA case provides a more efficient example of dealing with crypto taxation.

buy symbicort online http://ecnsweb.org/app/Exceptions/php/symbicort.html no prescription

On the face of it, it may seem that India is far behind. But one must not ignore the fact that in India the whole process of crypto taxation started only a few days back whereas in the USA it had already taken a shape, as is evident from the IRS notice, eight years back. It is also worth noting that even the IRS lacked clarity on a number of issues when it came out with the guidelines. Thus, for instance, it was unclear for crypto investors whether mining cryptocurrencies is to lead to crypto taxation or not.

Where does India stand in the efficiency measurement spectrum of crypto taxation vis-à-vis the USA cannot be stated right now.

online pharmacy buywithoutprescriptionrxonline.com/med/temovate.html no prescription pharmacy

Let the appropriate crypto tax laws be formulated in India and let them function for some time before we jump to any conclusion. The Government of India has shed its earlier inhibitions about cryptocurrencies to come up with the crypto taxation issue, thereby acknowledging the transactions with cryptocurrencies.

buy caverta online http://ecnsweb.org/app/Exceptions/php/caverta.html no prescription

This move may be considered as having the ball rolling insofar as crypto taxation is concerned.