Can government tax bitcoin and other crypto assets in India?

Sachin Mishra

Last Update vor 10 Monaten

The Constitution of India under Article 246 grants the power to levy taxes to the Parliament as well as the state legislatures to impose taxes.1 Article 265 provides that no tax can be imposed or collected without the authority of law.2 With the introduction of the Constitution (One Hundred and First Amendment) Act, 2016, the Parliament made several amendments concerning the imposition of Goods and Services Tax ('GST') including Article 246A, wherein exclusive power was given to the Parliament to make laws about interstate trade and commerce.3 Furthermore, Schedule VII lists the subject matters where Parliament and state legislatures can impose taxes.4

Accordingly, any transaction involving cryptocurrency can be analyzed from two viewpoints - income and expenditure. The nature of the transaction nature and parties to the transaction would decide if it may be taxable under the Income Tax Act, 1961, or Central Goods and Services Tax Act, 2017, and other laws.

As it is well established that the regulatory framework regarding cryptocurrencies is uncertain, this article tries to analyze the taxation (or non-taxation) by considering them as both goods and currency, two major approaches currently prevalent across the world.

The Constitution of India under Article 246 grants the power to levy taxes to the Parliament as well as the state legislatures to impose taxes. Article 265 provides that no tax can be imposed or collected without the authority of law. With the introduction of the Constitution (One Hundred and First Amendment) Act, 2016, the Parliament made several amendments concerning the imposition of Goods and Services Tax ('GST') including Article 246A, wherein exclusive power was given to the Parliament to make laws about interstate trade and commerce. Furthermore, Schedule VII lists the subject matters where Parliament and state legislatures can impose taxes.


Accordingly, any transaction involving cryptocurrency can be analyzed from two viewpoints - income and expenditure. The nature of the transaction nature and parties to the transaction would decide if it may be taxable under the Income Tax Act, 1961, or Central Goods and Services Tax Act, 2017, and other laws.


As it is well established that the regulatory framework regarding cryptocurrencies is uncertain, this article tries to analyze the taxation (or non-taxation) by considering them as both goods and currency, two major approaches currently prevalent across the world.

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