As this new budget holds lots of surprises , Arun Jaitley takes one more step to bring digital economy into the tax net .
The upcoming proposal focuses on tax profit made by digital firms in India using the concepts of significant India economy .
Sources say that this could affect all online advertisements , online searches , cloud services and other digital products which would ensure that profit made by these firms accountable to Indian firms is taxed in India .
Firms like Google, Facebook and Netflix might come up with huge consumer bases in India into the tax net .
To be assured , that firms based in countries containing double taxation avoidance agreements with nation will be protected .
” Any transaction in respect of any goods, services or property carried out by a non-resident in India including provision of download of data or software in India . ” are the words which define significant economic presence in the finance bill .
Jaitley claimed that the move will also give a boost to digital payments as block chain technology, which maintains a chain of records of transactions without the need for intermediaries , which would ensure greater security in the coming years . He said the government is against the cryptocurrencies that they can be a medium for money laundering and terrorist financing . He also added to it that ” the government does not consider cryptocurrencies legal tender and will take all steps to eliminate use of these crypto assets in financing illegitimate activities or as part of the payment system . ”
Rishi Gupta, managing director and CEO of Fino Payments Bank claimed that ” From an aspect of digital economy , allocating funds towards creation of digital infrastructure , promoting cashless payments , and building smart cities is quite encouraging step towards a developing nation . “