How will the crypto tax affect the crypto community in India ? - Sun Crypto
The laws of crypto currency seemed more defined with the budget this fiscal year 21-22. The accounting books this fiscal year will witness a flat tax rate of 30% on the profits derived from trade of virtual digital assets and 1% TDS on the transfer of digital assets.
The law was put across in straight terms for the virtual digital world by the Finance Minister Nirmala Sitaraman.
“Prima facie, this does seem a deterrent for the investors but its underlying implications show up a positive side”, says Pramod the co-founder of Sun Crypto, a crypto based firm in Jaipur.
The world of Cryptocurrency has been under the prying eyes of the people. Mostly due to its decentralised nature, huge rise and falls, and its so-called pseudo creator - "Satoshi Nakamoto", it has grabbed the attention of the entire world.
The picture was hazy but the returns glittered. Lot of speculation floated around. But now, the roadblocks are opening up. The world is seen shifting its perspective towards the digital currenc world. Rules are being defined and the market-investment is seen changing its nature towards a more clear picture.
“We certainly have come a long way. The defined tax regime for VDA( virtual Digital assets) pointed towards the lessening the speculations of people wanting to invest, says the founder of Sun Crypto, Umesh Prajapati.
“There were many investors who wanted to be a part of the cryptocurrency and digital asset-investment journey but feared that the Indian government would ban it anytime.
This law of 30% has provided more clarity and ruled out the possibilities of ban, for now, he adds.
This clear picture will help in bringing more investment to the crypto-world. However, when it comes to a flat rate, the rule could have been better, says Umesh. The investors would have benefitted more if the tax- law could have been ordered with slab brackets. A person within the income of say ………percent from VDA could have been taxed less. Likewise people with different income ranges from VDA transactions could have been taxed differently, thus providing ease to the investors. It is not easy for an investor to pay 30% tax on small gains. Moreover 1% TDS per transaction on transfer of virtual assets is not easy when it comes to the investors, he further adds.
The tax is not cut by the government directly but it is the responsibility of the person receiving the profit to or transferring it, to show it in the books and duly pay the tax.
Also setting off the losses is not permissible, which again creates a negative impression in terms of investment.
India has more than 1 crore investors and the future is full of possibilities, states Umesh. “With Dubai in the making of itself as the crypto hub, Australia heading towards a positive road to cryptocurrency, the recent executive order of Joe Biden also signalling crypto to be more serious, there is a need to reconsider this Indian tax regime. It does not deserve the status of being in the tax bracket similar to gambling”, he adds. India is full of possibilities. Wise investments can yield great results. A more confident tax measure can be a way to better the GDP of India.
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Disclaimer: Cryptocurrency and NFTs are unregulated digital assets and are subject to market risks. The views expressed above are of the author’s and does not reflect the opinion of Hindustan Times.