Abstract

The globe is undergoing a technological revolution, and India is no exception. With one of the world's fastest-growing economies and successful indigenous products that have been developed, such as the Unified Payment Interface, India has become one of the fastest-growing fintech hubs in the world, with digital currencies revolutionising today's financial ecosystem. Cryptocurrencies such as Bitcoin and Ethereum have proven to be a ground-breaking phenomenon which has attracted the attention of various global stakeholders. However, owing to their decentralised nature, pseudo-anonymity, and use for both investment purposes and transactions, appropriate consideration and caution are warranted in order to achieve fair revenue collection practices, provide clarity and confidence for investors and create a more stable financial ecosystem. Keeping in view the growing interest and investment in these assets, the government has sought to establish a framework for their taxation. Through this research article, the author intends to investigate and provide a comparative study of the ever-evolving landscape of cryptocurrency taxation with those of other jurisdictions, seeking to identify lessons and best practices, looking at basic issues, alternatives to the classification of the sold as currency, commodities or securities, compliance, and enforcement. This research also investigates the challenges that tax authorities face in assessing cryptocurrency transactions due to blockchain's decentralised nature and cross-border complexities. The research also takes stock of the regulatory regime that countries have instituted or evolved (i.e. varying degrees of taxation) - banning it altogether, allowing free transactions without taxes or some limited exemptions. By scrutinising these approaches, this research considers their successes and weaknesses in balancing innovation with regulatory oversight. The exercise continues the dialogue of how different jurisdictions can successfully pursue global cryptocurrency regulation, tax compliance and accountability in the landscape.

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