According to the Economics Times report, crypto purchases from overseas exchanges by Indian investors could be subject 2% levy.
The Tax department is now looking into whether a 2% levy is applicable on crypto-asset purchases by Indians from an overseas exchange. The Equalisation Levy is also known as Google tax. India had in 2020 expanded the scope of equalization levy cover ‘e-commerce supplies or services.’
“The way the new equilisation levy is worded and defined, it appears that will also be applicable on cryptocurrency bought from an exchange not based in India,” Girish vanari, the founder of Tax advisory firm transaction Square.
The levy is on the selling price, and companies may be required to add it to the cost of crypto assets. He said.
An expert said there is no clarity on whether cryptocurrencies can be categorized as goods, services or commodities.
Also Read: Indian Government Brings Crypto Ban Bill Under Review
“In the absence of any guideline on the treatment of crypto-asset there is ambiguity in how these would be treated under the tax law and FEMA (Foreign Exchange Management Act.)” said Amit Maheshwari, tax partner at tax consulting firm AKM Global.
In the last few years, many companies have moved to Singapore or Dubai in a bid to safeguard themselves from Indian law.
