India is the largest crypto market in the world, with about 100 million individuals invested in crypto and blockchain. With such a huge chunk of the population taking an active part in the industry, it is imperative that regulations be made regarding the wealth tied to crypto. A potential new tax may be levied on crypto transactions, that would require Indians to pay a whopping 58% of their crypto profits. A ministerial panel will meet next week to discuss a goods and services tax on bitcoin transactions, according to a Bloomberg report. The panel of central and state ministers is considering extending the tax net in order to more effectively monitor transactions in virtual digital assets. The panelists have not yet reached a consensus on the matter. However, the proposal is being put forward by a government-appointed task force. Bloomberg reports that the panel is unlikely to finish drafting a rate at its next meeting.
DEXs May Withdraw From India Post Finance Minister, Nirmala Sitharaman’s “Anti-Crypto” Tax Legislation
Cryptocurrency trading is subject to a 30% tax in India. It became effective in February 2022. Nirmala Sitharaman, the Indian finance minister, characterized the legislation as a positive step toward crypto regulation. In the first few months, the government’s new tax rate had a significant impact on crypto trade volume. Following the new tax rate, trading activity on major exchanges like Coinbase and FTX plummeted by 30%. Some large exchanges considered withdrawing completely from the Indian market due to the high tax rate.
The Indian government, however, didn’t think that 30% taxation on income was enough. The 28% tax rate will be discussed by the council next week, which was originally proposed by India’s Goods and Service Tax Council (GST) in May 2022. Recent actions show the government’s hard stance on cryptocurrency.