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Decentralised finance under taxman’s lens: Government set to levy additional taxes

Decentralised finance under taxman’s lens: Government set to levy additional taxes

Indians earning “interest” on their cryptocurrencies from platforms outside India have come under taxman’s scrutiny, two people familiar with the development said.

The tax department is looking to slap additional tax deducted at source (TDS) and equalisation levy on such transactions and interest income generated by Indians, they said.

The move comes at a time when decentralised finance (DeFi), which is the financial ecosystem built on blockchain applications and can be used for remitting money or buying insurance or even borrowing money against cryptocurrencies, is fast gaining traction, and many Indians have now taken to earning interest income by depositing cryptocurrencies for a fixed period of time with the platform.

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