Earlier this week, Finance Minister Nirmala Sitharaman announced that Profits from the sale of digital assets are taxed at a flat rate of 30% without any reductions or exemptions, at the same level as the maximum income tax rates. This applies to individuals earning more than Rs.1.5 crore ($20,000) per year, and the government is also introducing a 1% withholding tax to be deducted from cryptocurrency trading.
The observer said Steep tax rates could deter speculation This was clearly seen during the bustling bull market in April, October and early November last year.
“We believe that the taxation structure adopted by the government will discourage speculators and gamblers,” said Suraj Ramakrishnan, an accountant and founding team member of MintingM, a Mumbai-based crypto asset management firm.
A 1% withholding tax may help governments keep an eye on money flows. But it can cause problems for short-term traders.
“One percent deducted by the government is a tactical movement to save/path of all transactions. This will put exchanges and investors under better compliance rules. However, it can become very busy for frequent traders,” said Ravi Jain, co-founder of Blostem Fintech.
Crypto India co-founder Aditya Singh says that 1% is too much, “With 1%, a trader with an initial account balance of INR 100,000 may lose 10% of his money in 11 transactions.”
Rajat Lalwani, SHIB holder and moderator of Shiba Inu India Official, a Telegram group of more than 2,000 individual Indian investors, said the new tax structure would not be an issue for long-term holders.
“Most people who are unhappy right now are day traders. They are not very profitable and this is not good for them,” Lalwani said. “The long-term holders are slightly less worried. ”
“After the clarity of taxation We have noticed that many Indian institutions will view their balance sheet money investments in the crypto market as favorable,” said Ramakrishna of MintingM.
Institutional investors dislike regulatory ambiguity and uncertainty. The recent announcement of tax rules has made everything better to some extent.
India’s 30% Crypto Tax Will Discourage Speculators and brought about the need of the institution appeared first on Bitcoin Addict.