Proposed changes to the way income taxes are filed in India reportedly may affect people holding cryptocurrencies or virtual digital assets, those with investments in decentralized autonomous organizations and those who have moved abroad but still have business connections in India.
A proposed new common income tax return (ITR) released Wednesday (Nov. 2) by India’s Central Board of Direct Taxes (CBDT) asks Indians living abroad for details about their business connections in the country and about the businesses themselves, CoinDesk reported Wednesday.
For example, because the proposed document asks if the company has a significant economic presence in India, it could apply to crypto exchanges that have Indian traders, even if the exchanges are not incorporated in the country, according to the report.
“A lot of Indian customers are on these exchanges, and this might result in Significant Economic Presence (SEP) for these exchanges,” Rajat Mittal, a tax counsel in India’s Supreme Court advising crypto businesses, told CoinDesk. “If these exchanges have SEP in India, they might be required to discharge the equalization levy.”
The equalization levy taxes foreign eCommerce companies’ digital transactions or income made from India, per the report.
The proposed draft common income tax return — which is designed to merge some of the existing forms and simplify compliance — was posted online so that stakeholders and the general public may comment on it by Dec. 15, the CBDT said Wednesday in a press release.
In other tax-related news from India, the country’s Central Board of Indirect Taxes and Customs (CBIC) announced in August that businesses in India with an annual turnover of Rs 10 crore (about $1.2 million) and above would be mandated to use eInvoicing as of Oct. 1.
As PYMNTS reported Aug. 2, the move increased the number of businesses for which eInvoices are compulsory — a change intended to plug revenue leakages and facilitate compliance.
For all PYMNTS crypto coverage, subscribe to the daily Crypto Newsletter.
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More