Government officials believe crypto trading is similar to gambling and lottery, which have a 28% goods and services tax (GST).
Currently, cryptocurrency is categorized as a financial service in India, and an 18% GST is levied on transactions on exchanges.
In her February budget speech, finance minister Nirmala Sitharaman announced plans for a 30% tax on crypto income as well as a 1% tax deducted at source (TDS) on every transaction.
Since then, the Reserve Bank of India, India’s central bank, has warned against crypto transactions, with the deputy governor even suggesting an outright ban.
Currently, the government is working on cryptocurrency legislation as the industry awaits further clarity.