India's perspective on cryptocurrency: Between strict regulation and uncertainty.
India is generating intense debate regarding its cryptocurrency policies. The government imposes a tax rate of up to 30% on profits from cryptocurrency transactions, does not allow loss offsets, and applies a 1% Tax Deducted at Source (TDS) on all cryptocurrency transactions. However, instead of completely banning digital assets, the current policy keeps the market in a state of limbo between control and ambiguity.
Mixed signals from India's cryptocurrency policy.
The cryptocurrency market in India is currently sharply divided. While the CEO of the Indian Blockchain Alliance believes that strict regulations make the market more transparent, many investors and domestic exchanges are calling for reform. They want to reduce the TDS rate from 1% to 0.01% and allow loss offsets against profits to reduce the tax burden. However, due to concerns about tax evasion and increasing cybercrime, the authorities remain cautious about loosening regulations.
The Indian Tax Agency closely monitors cryptocurrency traders.
The Indian Income Tax Department has issued thousands of notices to individuals trading in cryptocurrency but not fully declaring in the tax year 2022–23 and 2023–24. Authorities suspect some investors are using cryptocurrency as a tool for tax evasion, especially during the period when regulations were still loose.
Currently, traders must adjust their declarations using updated tax filing versions. CoinDCX co-founder Sumit Gupta advises individuals to declare income from cryptocurrency, including income from airdrops or trading on international exchanges, to ensure legal compliance.
India's cryptocurrency tax law hinders development.
India's current cryptocurrency tax policy includes key points: a 30% tax on returns from digital assets, no loss offsets allowed, and a 1% TDS on transactions over 10,000 Rs. These regulations have led many large international exchanges to withdraw from the Indian market. Even domestic platforms are under significant pressure, calling for adjustments to the TDS tax rate and tax structure to encourage investment and sustainable development.
The rise of cryptocurrency crime – A concern for the Indian authorities.
The rapidly increasing rate of cryptocurrency-related crime has become a barrier to loosening policies. The Central Bureau of Investigation (CBI) has arrested several individuals involved in large-scale fraud cases.
Recently, the CBI arrested Rahul Arora, seizing over 7.5 billion INR (327,000 USD) in cryptocurrency related to fraud cases in the USA and Canada.
The GainBitcoin scandal in February led to raids at 60 locations, seizing approximately 69 million USD in digital assets. The estimated total damage exceeds 18.4 trillion INR (800 million USD) in this large-scale Ponzi scheme.
The CBI is currently developing an internal system to track and seize cryptocurrency assets, indicating that the government prioritizes creating a safe environment before considering relaxing regulations.
Conclusion: India is cautious with cryptocurrency, not rushing to fully open up.
India does not oppose cryptocurrency but has not fully accepted it either. With a series of tax notices sent to investors, the withdrawal of foreign exchanges, and increasing cybercrime, the government's focus remains on compliance and security rather than rapid market development. Until a complete and transparent legal framework is established, a truly cryptocurrency-friendly economy in India remains a distant prospect.
Source: https://tintucbitcoin.com/thue-tien-dien-tu-an-do-gay-song/
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