February 18, 2022
By Priyanka Shetty
Crypto enthusiasts in India have been waiting for a long time to get clarity on crypto and finally when the taxation of 30% on crypto was announced, there was hope after all for regulation. However, later it was specifically told that crypto is still not a legal tender. Analysts believe that high tax may force the industry to leave the country or go underground.
Here is what you need to know:
- While levying tax rules is a positive step, however, investors aren’t happy with the number. According to reports, analysts see the 1% TDS (tax-deductible at source) applicable to every single transaction involving crypto is a problem.
- Kunal Jagdale, Founder, BitsAir Exchange believes that the high tax rate could have a serious implication on the industry. The recipient is now liable to pay 30% of his return as tax, irrespective of his level of income. He said: “Although cryptocurrencies are described as assets in the budget, they are being handled differently than other assets.”
- He further added: “People also feel that higher taxes will force the industry to leave the country. Some even think that too high a tax may prompt the industry to operate underground as well as move upcoming innovations overseas.”
- While India is taking the rigid road on taxation, the United Arab Emirates and Thailand have reduced their tax rates to become more crypto-friendly.
About the author
Based in Bengaluru, Priyanka Shetty is a freelance writer for Blockchain Asset Review.