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The tax department is planning to impose additional tax deducted at source (TDS) and equalisation levies on Indians who earn interest on cryptocurrencies from platforms outside the country, according to a report.
"For the tax department tracking of these transactions is very crucial. The government could slap a 5 percent additional tax in the form of equalisation levy on any transaction where one of the persons is not based in India and has not submitted their PAN card or other tax details," The Economic Times quoted Girish Vanwari, founder of tax advisory firm Transaction Square, as saying.
Several people have started using the platform to earn interest by depositing cryptocurrencies for a certain period.
The Central Board of Direct Taxes (CBDT) is in talks with tax experts regarding how interest income generated from cryptocurrencies can come under tax regulations, as per The Economic Times.
The government has also levied 30 percent tax on returns generated from virtual digital assets. From 1 April, TDS of 1 percent will also be charged on all transactions in this regard.
(With inputs from The Economic Times.)
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