According to PayBito CEO Raj Chowdhury, India’s contribution to the development of Web3, Metaverse and Blockchain could increase exponentially if more Indians got involved in the digital asset space. Chowdhury believes that India’s current tax regime for the digital asset sector is limiting the sector’s growth potential in the country. In an appeal to India’s Treasury Department, the head of the crypto trading firm has said the 30 percent tax on crypto profits needs to be reviewed and potentially cut now that the nation is just days away from agreeing its union budget for the fiscal year 2023. 2024
“cryptocurrencies have streamlined transaction settlements in a way that has been embraced by MNCs, payment processing services and expatriates sending earnings to loved ones via wire transfer. The 30 percent crypto tax plate has been detrimental to the growth of the crypto ecosystem across India as several exchanges pull out or move into crypto-friendly countries.” Chowdhury said in an opinion.
Ashish Singhal, the CEO of the Indian crypto exchange CoinSwitch has also said that this year, India’s approach to the crypto sector should be about “refining.”
“India should incentivize users to stay within national jurisdiction by reducing the tax burden. The current tax system and lack of provisions to compensate for losses make the markets illiquid and investor sentiment is falling. Such circumstances push consumers’ money into gray markets and expose them to regulatory problems,” Singhal told Gadgets 360.
In a subtle nod to the crypto sector, the Indian government announced last year that all profits would be dumped crypto trading Activities are taxed at 30 percent. Additionally, India deducts one percent TDS at each step of the transaction to keep track of the crypto transactions, which can be done largely anonymously.
Despite outcry from members of the crypto community, the government did not budge crypto tax decision.
“If TDS aims to establish a trail of crypto transactions, a lower TDS rate of 0.1 percent can achieve that. Similar to listed securities, existing provisions on fixed assets should also be made applicable to VDAs. Third, in order to make India a competitive country in the growing crypto industry, the tax authorities should allow the carry forward and offsetting of losses from the sale of VDAs, similar to what is done for capital gains,” Singhal noted.
In its latest report, Indian research institution It yes had said that Indians traded over $3.8 billion
The same report had also highlighted that these Indian exchanges lost 81 percent of their trading volume once crypto taxes were introduced in India.
“A standardized framework for crypto regulation can put India in the position of a global leader, but the current massive taxation must stop,” the PayBito chief said, urging the Indian Treasury to expand the space for the crypto industry to thrive in India .
