India to start taxing crypto profits

Cryptocurrencies in India are going to be subjected to a 30% capital gains tax starting this April.

This means that the country will see its coffers filled with proceeds from the sales of NFT and bitcoin (BTC), and their related earnings.

The proposed percentage is closer to regulating a gambling product than it is to regulating a financial mechanism, which reflects on India’s overall aversion to cryptocurrencies.

However, introducing a tax instead of an outright ban has its upsides. The country threatened throughout most of 2021 that it would resort to a ban, but lawmakers were gradually swayed in the opposite direction – regulation.

Consumers and investors will have to rapidly catch themselves up on the new rules and find out how the tax regime works to comply throughout the financial 2022/2023 year.

However, people will not be asked to pay tax on digital assets they are just HODLing. In other words, much like the stock market, the only time the tax will kick in is when a person has sold an asset, and when and if a profit has been made. This means that selling under the original value would not trigger the tax.

While the 30% seems bad for investors, the proposed tax regime is actually sensible. There would also be a tax deduction at source. Which means that a 1% “fee” will apply to all your transactions even if you don’t make a profit.

However, not everyone is happy with the rules as investors in the crypto space need to move quickly and make more transactions than the average stock trader for example. This could deplete available capital fast. Regardless, regulating crypto in India is a step in the right direction as opposed to just banning it.

In the meantime, you may continue to use crypto in India for fun at Bitcasino, 1xBit or FortuneJack.

Source

Updated: 03/21/2022 — 16:00