Crypto tax in India has been reportedly set at a massive 30%, as the nation is moving to legalize digital assets fully. Furthermore, they've also announced their own "digital rupee."
TheNextWeb reports that the proposed crypto tax will include cryptocurrency exchanges and NFTs (non-fungible token) trades, which will likely upset many due to how large the tax rate is.
This news comes after India has been quite uncertain about how they want to handle cryptocurrency trading as a whole. But as finance minister Nirmala Sitharaman said in a statement to the parliament, the country is close to creating a new draft of their crypto bill, whose aim is to regulate all crypto and blockchain-based transactions within the country fully.
As per the original TheNextWeb report, it introduces the 30% tax rate as India's way of legitimizing crypto. This is a far cry from the previous situation in the nation, which saw some traders and HODLers in India fined as much as $2.7 million alongside serving a 1.5-year jail sentence for trading on unauthorized trading platforms.
The sky-high crypto tax in India is due to the country's decision to put all digital assets within the highest tax band available. Furthermore, a report by Reuters revealed that any losses incurred from trading cryptocurrencies could not be offset against traders' other types of income.
With this tax rate, crypto traders in India can now expect to pay over 30% of their profits in taxes and other charges. For instance, making a profit of 100 rupees could net you a tax amounting to 42 rupees, considering the new rate plus a surcharge and cess.
Aside from the new tax rate, the finance minister also announced the country's very own "digital rupee," which is scheduled to be issued by the Reserve Bank of India by 2022-2023, writes CoinDesk.
Legalizing cryptocurrency trading in India is likely music to the ears of the country's 15-20 million investors, whose holdings have a combined value of $5.37 billion.
Read also: Cryptocurrency Crime Impact Expected To Fall Even Further This Year--Report
Is The Crypto Tax In India Too High?
If you're a crypto trader in India, you might say that a 30% tax rate on your profits is too high. But that's really the price you have to pay if you want to keep investing in digital assets, as their adoption rates by world governments are still a bit iffy.
A person holds on January 17, 2018 a visual representation of the digital cryptocurrency Bitcoin, at La Maison du Bitcoin in Paris. (Photo by GEOFFROY VAN DER HASSELT / AFP)
Look at the countries like China and Russia, and you'll see the situation at hand. China, for one, has been cracking down on crypto mining and trading operations hard, basically forcing people to move to countries like the United States, where laws are laxer. On the other hand, Russia has proposed an all-out ban via its Central Bank, which likely contributed to the recent large-scale crypto price crash.
For now, Indian crypto and NFT traders will have to take what they can get. It is still far easier to operate things with legal oversight.
This article is owned by Tech Times
Written by RJ Pierce
