📢Indian ITAT ruling: Cryptocurrency trading gains before 2022 will be taxed as capital gains tax, and early investors will have their tax burden greatly reduced
The Indian Tax Tribunal (ITAT) recently made an important ruling, which is good news for investors who have realized gains by holding cryptocurrencies for a long time in the country!
The Income Tax Appellate Tribunal (ITAT) in Jodhpur, India made it clear that profits from buying and selling cryptocurrencies such as Bitcoin and Ethereum before April 1, 2022 are all counted as capital gains, not ordinary income. This means that if you trade the cryptocurrencies you hold before 2022, the tax rate you need to pay will be much lower!
The bill stipulates that before 2022, the tax rate for short-term capital gains is 15%, and the tax rate for long-term capital gains is only 10%. This saves a lot of money for those early investors compared to the current 30% unified tax rate.
This ruling was made in a case. One person bought $6,478 worth of Bitcoin in 2015-16 and sold it for $78,803 in 2020-21.
When accepting the ruling, the defendant argued that he had held the cryptocurrency for more than three years, so he should be taxed as long-term capital gains. But the tax bureau disagreed, saying that digital assets have no intrinsic value and should not be considered property. But the ITAT judge supported the investor and said that according to the income tax law, cryptocurrencies are property.
Although this ruling is good news for early investors, India is still lagging behind in digital asset regulation. Many virtual asset companies have moved to more cryptocurrency-friendly places, such as the UAE or Singapore.
However, the Indian government is now also discussing with industry experts to create a balanced cryptocurrency regulatory framework. I hope there will be more good news in the future!
Viewpoint:
This ruling by India's ITAT is undoubtedly a major positive for early cryptocurrency investors. By classifying trading gains before April 1, 2022 as capital gains, the tax rate will be reduced, which will not only reduce the tax burden, but also reflect the tax system's adaptation and recognition of emerging assets. However, this also exposes India's insufficient regulation of digital assets, which may affect its competitiveness in the global cryptocurrency market.
