Life with 30% crypto Tax and upcoming 28% GST
It's been almost one and half months since the crypto tax was implemented in India and surprisingly it's 30% flat on all crypto transactions. Earlier it was looking good with the hope that the government is looking into crypto with a positive mindset however it seems pretty difficult now because a couple of things are not going well. Crypto is still not legal in India from the regulation point of view however it's not illegal as well. With the introduction of the tax in Feb month, it was expected that now things will be easy for everyone and even there will be enhanced banking support to ease the business however things have gone the other way round.
Because of the higher taxation, there is a shift in the approach of investors and now they are moving ahead with long-term goals withholding which is good for the crypto community but not for exchanges. When there will be fewer daily traders then liquidity volume can be a bigger problem and if this continues for long then probably lots of people will have to struggle with order fulfillment. Since the majority has started holding their assets so they are also entering into stake and earning. This is a way to earn crypto holding and a good way to earn passive income.
The tax issue is still the same and TDS will also be implemented from 1st July. Once the TDS is applicable then 1% will be deducted from all the trades and this will not just hamper the trading but also make the transaction handling tough. Not every crypto trader would be able to manage it with ease so probably because of this also many would make a move to the long term. Apart from this now there is news that govt is planning to put 28% GST on crypto this is the third problematic situation. Although as of now this is paid by the exchanges if there will be less trading volume and increased GST then somewhere it will affect the users as and investors cannot be left behind.
After all these decisions by the govt somewhere it feels like that govt is not keen to support crypto. Even investors have started looking for DEX and projects like DeFi and metaverse where they can invest for long period and they need not to pay any tax liability since the value is not in the form of INR fiat currency.
Life in crypto has been getting tough and the news of 28% is another problem but there is nothing that we can do to change the situation. This is also affecting the exchanges to run the operations and even exchanges will rarely try to bring innovations to the place. Despite all these new exchanges is also considered India as a crypto market were some Indian exchanges are planning to shift to another country however there is no official update about it.
I can't deny the fact that I am also worried about such wrong decisions and I also believe in the long term. Hopefully, something positive will happen that can make it a better segment to use and bring many people over here but as of now the situation is not so good and we need to plan our future actions accordingly.
Thank you.
Your post was upvoted and resteemed on @crypto.defrag
Hi @alokkumar121
I think the situation in India as you raise is truly problematic. Because taxes, more taxes, what will cause in the end is an abandonment of the crypto market by many companies in your country, which will surely travel to others with friendlier policies, and that will facilitate the process of generating jobs, and more.
This situation is really unfortunate, I hope it can improve soon, because it will surely affect many people.
Hi friend
Yes, the situation is problematic these days. Earlier it was looking positive but seems govt is trying to discourage people from crypto and putting heavy taxes. banks are making things difficult at the same time fiat deposit and withdrswals are not working. Hope to get it better soon
I read another country has declared zero tax for crypto held over a year, I think it's a good idea. India's 30% task is tear dropping.
As an Indian, it feels bad when we hear that countries are promoting crypto but here we are burdened with heavy taxes.
This makes me sad. I hope India overtime becomes more friendly to crypto.
its a sad situation for Indians but hope things improve in future
Yes for us this tax is like crushing the crypto industry.
It is sad but little is being done to promote or protect the industry
Yes its crushing the crypto industry and should not happen but seems like govt is not ready to understand.
@tipu curate 3
Dear @alokkumar121
I always thought that Europe has high taxes. I have to pay 19% on all crypto being cashed out to FIAT. And GST (in europe it's called VAT) is as high as 23%.
And I thought that this is already insane.
But seeing 30% crypto tax and 28% GST is absolutely mindblowing.
Correct me if I'm wrong, but if you pay tax then whatever is being taxed is supposed to be legal. So crypto as an taxable asset should be legal. After all, taxes cannot be paid from illegal activity.
Cheers, Piotr
Hi @crypto.piotr
You are lucky that you are not in India else you would have to 30 which I think is very high. Irony is that its flat and everyone has to pay if they earn anything in crypto and there is no option to set off loss. So if you earn the tax is applicable but if you lose then its yours.
there is conflict on this and no clarity at all. Govt says that crypto is neither legal nor illegal however getting tax is govt's sovereign right on any income. They are exploring this and will see what do in future but as of now its in neutral state.
Honestly its all making things difficult for crypto.
Thanks
Indeed @alokkumar121.
It does seem that I'm lucky not to be born and live in India (since I'm so much into crypto)
My question is: does your tax office have resources to even find out who sold crypto (without declaring it)?
Strange.
Based on my knowledge, goverment cannot tax anything that is illegal. That's why many jobs (like being prostitute) is not taxable and cannot be taxed no matter what.
But perhaps Indian goverment doesn't follow same "rules".