After a lot of tosses and turns, the government of India has finally decided to show their cards on the matter of cryptocurrency regulations. For a while, the Finance Minister’s office and the Reserve Bank of India protested against the allowance of cryptocurrency trading and use of the digital asset as a mode of payment in the region. However, the government also conducted meetings with the local businesses and crypto stakeholders.
Furthermore, the government agencies kept iterating that the government is leaning towards cryptocurrency regulations rather than an exodus like China. Despite all the promises and encouragement, the government has finally decided to drop a heavy bomb on the heads of cryptocurrency traders in both the retail and corporate sectors.
Bad News for Digital Currency Investors
April 1st this year can be called a day when the government of India played a bad joke on the local digital currency traders. Rather than bringing a smile, the taxation policies will inspire a frown on the faces of all digital asset traders in the region. Starting from next month, the traders using Bitcoin and Ethereum will have to pay a hefty 30% tax in lieu of capital gains.
It means that 30% of the revenue generated from Bitcoin and Ethereum trading will now go to the government of India in the form of taxes. Furthermore, the traders will also have to make peace with the 1% tax imposed on every digital currency transaction. Naturally, the taxonomy laws have sparked a slew of protests and outcry from the local cryptocurrency community members.
India is considered a lucrative business market due to its 1.4 billion manpower and emerging economy. The taxation law was first proposed by Finance Minister Nirmala Sitharaman in February of this year. Many financial experts postulate that the law with works as a deterrent for the cryptocurrency sector that has inched forward in the country for years.
Thus far, the government of India has not introduced any clear regulatory framework for digital currencies in the region. Several financial experts warn that following the new taxation laws, several big cryptocurrency organizations will leave the country before the end of the current year.