Topic: Very High Tax on bitcoin gains! What if Govt tells like this (Read 609 times)

There is no way to tie an identity to a bitcoin address. I can generate a million bitcoin address and send how much ever I want to all of them. Suppose a law comes out that bitcoins possessed by Indian citizens should be declared and taxes must be paid for possessing them. As absurd as it is, there is no "Indian" bitcoin address that is "mine" like how I can say about my bank account. A person can send bitcoins to ten different addresses. It can all come to me or it can come to ten different people. There is no way for a govt to figure that out. For taxation for work, centralization is mandatory. A law that cannot be enforced is not a law. It is wishful thinking at most. Hence I think a law cannot come into effect like you are saying.

At most there can be a law forcing Indian exchanges to reveal the withdrawal addresses of their customers. But then what? Its transferred to another address... could be another address of mine... or it could be Bittrex or Kraken. By some magic, they were able to confirm that it was indeed a Bittrex account... and what... the Indian govt stating the new Indian law and demanding they confirm the identity of the account holder? You see where its going? At some point the Governments across the world will need to unite and become a centralized "authority", kinda like the UN for anything like that to happen. Even then all it takes to shatter that foundation is one country to make a killing by announcing "Hey, come over here and open your exchange here. I don't have any ties with the other networked countries".

So you see, the scenario you are talking cannot happen even if India was under military rule, simply because the law cannot be enforced. Its like saying all the people who like Salman Khan will be taxed. How on earth is a law like that going to get enforced?

The procedure to create a new taxation block might take years and still fail. It's almost impossible to create an independent block of laws just for cryptos.
At most they can bifurcate crypto earning in highest tax % block.

Most probably govt. shall impose strict regulations on exchanges rather than asking general public to disclose their earnings vias cryptos.

I do not think govt will make any thing like this of taxing 90%. Firstly if they do not ban then we may consider all this proposal. If they want to tax this then may be it will be at par with stock market transactions. Also it would be interesting to see who will be controlling will it be SEBI or RBI?

I think the government should treat bitcoins like any other asset and impose capital gains of 10/20% (without / with indexation). Bitcoin may not receive preferential treatment (like equity or houses) but shouldn't be penalized compared to other asset classes.

what if the draft proposal recommends and government implements a very high tax like 80 to 90 % tax on all your bitcoin returns...

what will be your opinion..

What is the ideal percent which governemnt can impose on bitcoin gains as capital gains?


then people will declare its all income to avoid such a high bitcoin capital gains..

then what will govt do?