Bitcoin Forum

Update (June 23, 2022): They could add another 28% tax on sale of goods and services (GST).
Also, title change.

The proposal by the Indian Finance Prime Minister as announced during the Budget 2022:

• 30% tax on all income/profit from sale/transfer of Digital Assets
• No deductions allowed in the tax computation except the cost of acquisition
• Losses are also non-deductible or cannot be used as an offset against other income
• 1% Tax Deducted at Source (If I understand correctly, it's similar to Withholding Tax)

If you're wondering why they used 'Digital Assets' instead of 'Currency', they do not recognized crypto as a currency. The PM said it only becomes a currency when it is issued by the Central Bank (CBDC) and anything outside it is an Asset.

What are your thoughts on this?

It's a double edge to me. We have the legalization aspect (after so many ban proposals) but the rate looks quite high especially when they lowered the personal income tax rates (for certain income brackets) and the Capital Gains Tax appears lower too. It seems like they really want to get the most from crypto retail traders and investors because they know that there is a strong demand and a large number of transactions.

https://timesofindia.indiatimes.com/business/india-business/30-tax-on-digital-assets-all-you-need-to-know/articleshow/89267925.cms

High taxes as in this case motivate people to underreport sales in order to avoid paying them or otherwise circumvent the law. There are more than a few cases throughout history where lowering taxes has raised more money.


What governments like this one do is kill the goose that lays the golden eggs.

This seems like quite a harsh rule to expect to implement. It means speculators there won't be able to take as much of an advantage of the market in case something goes wrong - might make things like scalping and swing trading seem more risky.

---

I'm sure therell be many fancy ways the cost of acquisition thing can have exploitable loopholes too unless it's very specific in the legislation.


High taxes on innovators is a very good way to destroy innovation. Many countries have an "entrepreneurs' relief" for such a reason which normally reduces tax or spreads it out.

They don't have any choice if the government want to legalize crypto and took insane fees, at least they're happier than the crypto is banned. Many people doesn't want to pay large fees, most probably they will do anything to avoid tax just like in few years before when crypto is banned in india... they will do anything to hold and trade crypto. IMO they need to make the tax is tiered and not fixed as long as someone made profit.

It's like ban or taxation.

I guess people from there would be fine if they just impose the ban and just keep quiet keeping their digital assets from them. Since they're not even going to know who are the people that holds and has it.

I agree, it should be like this. The higher profit, the higher taxation so that small traders and investors won't be hurt that much with this imposed taxation.

The solution is simple if you’re a Bitcoin HODLer. DON’T SELL, HODL.

OP, does India have the same rule that if you are HODLing your investment for more than one year, the profit is considered a “long-term gain”, and therefore the taxes are calculated at a lower rate than”short-term gains” of investments held less than one year?

This is pretty hardcore. It is like they banned crypto without actually banning it.


When it comes to what bitcoin really is though, I guess everybody is free to make his/her own definition because it is decentralized. Some people define it as a currency, some other say it is an asset, some people would even dare to say it is nothing but a scam...

Who cares  about what they say?

Just another stupid proposal which may/may not become the law. I have no idea why so many people take these proposals seriously even though they haven't been approved/rejected yet. Such people need to improve their brain-power.

The Indian government clearly gave up on banning cryptocurrencies directly and are trying to regulate them in this manner.

If this particular proposal actually ends up getting approved and legalised, I believe that Indian crypto traders will find a way to circumvent this issue just like they have done so many times in the past.

its just a proposal and provably many people who use bitcoin will protest against it since this plan made by their official can really hurt their pockets. Maybe this is their first step to discourage people to use crypto that's why this is pushed by certain official but hopefully this one will never pass so that people will not get affected to much on those possible implementation.

I would not dismiss this as a mere proposal because it's their Finance Prime Minister who is already talking. I won't be surprised if it becomes a law by next month.

Nailed it.

Yeah we have different view but I still find it important to make a clear distinction from their perspective.

Based on what I read, it seems like they made theirs much simpler. Taxes can only be applied when you transfer or sell your crypto. Anyway, it won't be long before this proposal becomes a law. Let's wait for that to get more details.

They will probably find it hard to implement this tax law at the beginning but I bet they have the means to track those who previously used custodial/centralized platforms to trade.

For now, it's 30% but who knows if there will be future amendments? Maybe the crypto community there could have some power to make suggestions in the near future.

We'll have to wait and see the actual law when it's out.

Many other people believe in the same way and they think digital currency is not actually cryptocurrency including myself because the digital currency is not actually encrypted like cryptocurrency is decrypted and that's not centralized at all so I believe is the same way. Regarding the tax, I think there will be more countries trying to take tax from their people instead of selling products to the other countries because even during the time when they cannot trade to other countries they can still have income from the tax they take.

great step to legalize crypto, but I don't agree with 30%. isn't that too big?
If this policy is legalized, I think there will be a lot of people against it. because the percent of the tax is too high, and does not make sense if applied.  they should come up with a new better proposal and change the 30% to a reasonable numbers.

Yes, those that have records already in centralized exchanges, they can ask those exchanges for the files and data of their countrymen that have used their platform.

That's the first step that they'll surely do if they want to get serious on tracking those just to have an idea who are these people that have at least owned or traded crypto and is likely still holding presently.

When it comes to taxes, I think the best way to go is moderation. There was a proverb I encountered a long time ago referring to a string instrument which goes like, don’t tighten the string too much, it breaks; don’t loosen it too much as well; it doesn’t make a sound. This is also how taxation should be handled by governments. An unreasonably high tax will discourage businesses or investors or even honesty from their declarations while too low taxes will also limit government revenue. It will have to be moderate as not to shoo away people and companies to tax havens or force them to hide taxable income but also not deprive the country of what it deserves from the income of its people and companies.

It's a proposal, I thought it was a law?
Imposing taxes without a serious investment in how to track these currencies is considered useless and is specifically targeted at businesses that will try to accept bitcoin such as stores and others, but it is difficult to track traders, especially in a country like India.
It's also motivating users to buy and avoid selling.

In general, I hope it becomes a law to get rid of the topic of "India's ban of cryptocurrencies"

It’s good that India still intends to legalize the circulation of cryptocurrency. But we should wait for the relevant law, because there have been various opinions about the fate of the cryptocurrency for a very long time and there was a lot of information about its possible ban in this country.
Of course, a 30 percent tax on profits from cryptocurrency activities is very large. Most likely, the Indian authorities want to reduce the desire and ability of citizens to engage in cryptocurrency in this way. But this may be a further field for struggle, now the main thing is that the cryptocurrency in India should be legalized.

People's reaction are mixed on this proposed tax digital asset income. Some are understandably angry while others are okay with it because it's still better than a ban. Those who agree said it's just the first step though which probably means they are waiting for the actual law and also plan to make proposals to reduce in the future. If passed, I think it will take a few years before amendments will be made.

Have already replied to a similar discussion on Reddit. Basically, this proposal is much better than a ban, which was on the table not too long ago. Therefore, the move away from a ban and the attempt to treat cryptocurrencies in terms of tax law is a big step forward. Whether the 30% tax is justified or not is subjective. I for example would be very happy with this tax rate on crypto income, because in my country I pay 40+ percent tax on crypto income ;)

It is too high to tax an income that way and 40% is out of it. This means every income will go into tax and India is having a high cost of living there, the situation will not be a good one in that aspect. When income goes into tax it only increase the level of hardship in the people because the standard of living will also go higher.

Yes because some think that its good recognition by the government since by putting tax on bitcoin it show that it has a chance to became legal on their country. But also at negative side its like discouraging their citizens to use since there's a huge tax will taken to them if they keep using this. Maybe the indian government grant this since they see a vast majority disagree on what action they do towards bitcoin and they just put that huge tax to eliminate it slowly.

It's just a proposal, so maybe it won't be like this, but India hasn't been crypto-friendly for a while. A 30% tax is very high, and if it also applies to selling and transferring, it basically makes everyday use of Bitcoin impossible. Taxes should be reasonable and progressive, starting at a very low rate. And transfers shouldn't be taxed at all, and neither should small capital gains be taxed. I hope they'll come up with something better, though. Something that motivates people to pay taxes and use cryptos. Because bad regulations tend to motivate people to stay in the shadows, simply, so the state doesn't get much in taxes.

They had a lot of people protesting against bans and they know a ban looks bad and puts them on a map along with some authoritarian regimes like China, so the best course of action was to avoid it. At the same time they want to discourage people from using cryptocurrencies so 30% tax is going to work good. From my libertarian point of view, this tax is abusive, but fortunately I don't live in India. We all have a choice. If the government is abusive, move somewhere else.

those who understand the benefits that we get from Bitcoin will certainly ask to unbanned and as support for this. But those who are ignorant and pretending a victim of a huge crypto scam will surely be happy and even encourage the government leaders to stop and put an end.
I'd never find another reason why India's leaders are proposing 30% tax to all crypto holders as it possibly they wanted to discourage people to use and invest this. That actually isn't fair but has nothing to do when officially sealed as legal.

Unfair taxes will actually forces the people to evade it or they will find alternatives to hide the source so p2p transactions will again preferred by traders so they can report the source as others and pay less taxes and its a big blow for the exchange users because they can't avoid reporting since KYC is mandatory in all the exchanges operating there.

Obviously we hope this is the case for all bitcoin users that are located at India, but I do not think this will be the case, politicians think of the country as belonging to them and not to the people, so they think that whatever laws that they pass are going to be followed by the people no matter what, however when a law is unfair people have the option to use civil disobedience and ignore the law, and bitcoin thanks to its decentralized nature could allow this to the people living at India.

They used "Digital Assets" because they are mentioning NFT too along with cryptocurrencies. They haven't passed any law about cryptocurrencies but implemented a tax on them. This is clear that they are discouraging their people to invest in crypto assets.  They implemented a tax for legalizing your crypto transaction but it's still unregulated in India. They were close to banning cryptocurrencies in India but haven't done it by seeing a lot of money invested there.

I think they are just trying to say "Do not invest in cryptocurrencies" indirectly.

That is definitely straightforward decommissioning strategy of the crypto currencies in India I guess. They simply don’t want their Indian people to go and invest into crypto freely. Or there is another possible way to earn some good bucks from the taxes and let their people use the crypto. In either way government of India seems to be on winning side here. I am just seeing one positive thing here, they have thought this through and trying to win the hearts of their people. I mean this is perfect politics, they neither deny the fact of using crypto nor using it freely. So it’s up to the people of India whether to use the crypto or not. They are allowed to use it but they have to pay good amount of tax for the same. Well played by PM I guess.

When we talk about the taxation in a country as big as UK even, the government have two kinds of taxation proposed for normal tax payers the tax is 10% and for higher tax payers, it's 20%. Considering the taxation in India, where lies immense poverty, corruption, upheaval of the economics one have to understand how irrational it is to ask people to pay 30%.

30% is not just justifiable, it's actually something that is very wrong, justifying it means justification of corruption in the government. They have to understand that this is supposedly a very important means for some people, eventually government might take the freedom away from them, they might try and also ban it to make room for digital rupee.

The Tax is ridiculous to me, it will encourage trading crypto in the black market. So the government will lose Tax. We know citizens' behavior, they will fund some way to skip Tax. Likely they will use the decentralized and non-custodial wallet to store and trade cryptocurrency. We have to keep in mind, a centralized organization like the government will not give you many facilities to use cryptocurrency since it's decentralized. The president describe what he understood, it's not about all that a president should have depth knowledge about cryptocurrencies. That's why he is calling it a digital asset.

Neither they havent realized that on which the step they had made is totally opposing on what  they are trying to achieve which is mostly in talks of taxation.. 30% is totally that absurd
and if they are trying to suppress those services around via doing this upscaling the tax then it would really just  result into more engagement on black market or be done
underground which the thing you have said is true on where people would tend to find out ways and methods on avoiding such fees no matter what the cost.

That's like a robbery, and considering it's taken from the income of sale, it only says to discourage the use of digital assets like bitcoin. Well, maybe it will also result to an understatement of sales, but if the government is very strict in implementing then people who would prefer a digital asset has no choice but to comply with the law.

Being a resident of India, I don't understand the criticism that is being directed towards the new proposal. Those who are arguing against it are completely ignorant of the facts. The existing tax rate on profits from cryptocurrency is up to 43%, since it is classified as ordinary income. Now the government has classified profits from crypto as capital gains, and the tax rate has come down to 30%. And this rate is comparable to tax on capital gains from other assets such as gold and real estate. Obviously you can't expect crypto to be taxed at a rate that is equal to that for stocks.

Indian government is always slow to respond properly, India has got highest number of crypto investors in terms of numbers
This step will be a demotivation, and eventually India will never be able to be frontrunner in crypto world.. maybe they will realise it late and then become crypto friendly

Well, you know more about your country and how your government manages to collect taxes from the people. Eventually, the majority could say that it was too big as they compared it to their respective places/country, and even me. Here in my country, we don't pay that much, not even it surpasses 20% but can't imagine in your place was 30% tax to be collected, even it was just a proposed plan but in the eyes of the majority that seems unacceptable.

They've got a big country so that's to be expected plus India has been like this with crypto for awhile now so I don't think that it's really that big of a deal that we are going to make a fuss about it because I am sure that it's going to be forgotten in a months time if not a year. Also, I am sure that crypto users in India would find a way to make sure that they don't pay those taxes.

Anyone that understood government overreach saw this coming, this is a ban by proxy, a 30% tax rate is insane.

Legalization of crypto isn't what's up for a discussion in most countries. It's the overregulation and excessive taxation that forces ordinary and institutional users of crypto to divest into other assets and use traditional fiat currency. I've seen people celebrate that a country hasn't banned crypto, citing a rather innocuous attempt of mere "regulation."

This is what regulation looks like, making crypto unattractive as possible with disproportionate tax rates. I can guarantee you India has a significantly lower effective tax rate on capital gains on any other asset. Crypto coincidentally is the odd one out.

.

Oh so it's just a proposal and yet I see all over the media that Bitcoin now legal in India with this as focus point, such misinformation. This isn't better than a ban. The citizens should protest. This is daylight robbery and if this get passed into law it will demoralized many people from getting involved in the cryptocurency space to avoid high taxation. I bet this is exactly the government game plan.

If I was a citizen I'll prefer a ban then we enthusiast looks for other alternative to participate in the industry and this will drive up the peer2peer transaction awareness and volume in the country. Take a look at Nigeria, every opportunity the government get they try convince Nigerian into not getting themselves engage with the industry yet their plans fails. They even tried launching their own so better version;f Bitcoin but failed.

It's considered as such probably because it was announced by the Indian Prime Finance Minister herself. It's like written in stone already even without the written law as one of the journalist said.

Was it? The new tax table was further divided into more categories compared to the old one but the max for both was still 30%.

I wonder why they don't consider crypto as a currency yet implement a huge percentage of taxation from it. I'm sure that crypto users will suffer from it but still have no choice if the government would implement it. That's how the government would really work over crypto, if they can't regulate crypto, they will tax it.

I already explained the reasoning why it's not a currency to them in the OP. Also, it doesn't have to be classified as such before it could be taxed. Stocks aren't considered as currencies and yet income derived from investment and trading are subjected to tax.

Tax crypto income first, more regulations on centralized exchanges and custodial wallets to follow ;)

In order for you to get an exhaustive answer to your question, you need to initially refer to the constitution of the same India, where I am sure, like other countries, there is a provision that states that money, that is, finance, can only be assets issued by the state itself, or the central bank of this state. Based on this, the definitions for cryptocurrencies in India look logical and fit under their laws. As for high taxes on the use of cryptocurrencies, this is certainly bad, but on the other hand, the state also wants to make a profit, which is also logical. I do not think that the decision to completely ban cryptocurrencies in India was the best decision. In any case, if you want to make money legally on cryptocurrencies in India, this offer may well suit you, if not, then you will have to look for another way out.

Very few countries around the world recognize crypto as a currency and even fewer recognize it as a legal tender. And in third world nations such as India. even getting the recognition as a legal digital speculative asset is very difficult. I am glad that despite the 30% tax on profits, the government has legalized it. A lot of old school businessmen, investors and politicians were arguing in favor of the complete ban on crypto. It took a lot of courage from the finance minister to legitimize cryptocurrency despite all such demands.

That's the only good news. Even though the rates are pretty harsh, any acknowledgement from the governments is better than getting a direct ban. Maybe later on they will lower 30% to a more humane rate like 20% or something but I don't have high hopes for that right now. After a year or two when things cool off, they'll probably reconsider their decision.

I definitely agree. The bureaucrats wanted a total ban on cryptocurrency and the suggestion from Subhash Chandra Garg (former Finance Secretary of India) was to make possession of cryptocurrency punishable by up to 10 years in prison. The finance minister ignored those recommendations and made crypto legal in India. The tax rate may sound a bit high, but in India capital assets apart from stocks are being taxed at this level. Maybe they will consider lowering the rate in the future, but I am not very concerned. What we needed was legalization, and we got it.

I think it's great that India has legalized bitcoin. I see this is a great opportunity for Indians to get into the crypto space and take advantage of this amazing revolutionary technology.
Legalization will inevitably have a positive impact on the Indian economy as BTC has created significant wealth for countries with a large percentage of adoption.
It's unfortunate that they’re taxing crypto but I think that it's expected that governments want a piece of the action considering how many citizens around the world have benefited financially.

This seems to stem from the belief that most people are in it for speculation. If they can speculate, then they can surely pay the highest tax bracket. This is pretty ridiculous in my opinion. They are targeting the budding market of NFT artists and developers en masse.

That mostly hurts those with a huge portfolio or the exchanges mostly looking to offset their taxes by showing various deductions. This is a signal that if you work in a business that we don't want you to, we can surely punish you in other ways.

I don't think i understood this well enough to comment. Someone else is welcome to comment.

This one is to create a transaction records of people buying at centralized exchanges like WazirX etc. Every time you make a buy, a 1% deduction will be done by the exchange. This probably creates a source of income as well as accounting about the volume of buys happening on the exchange and in crypto as a whole. Once again, sly and underhanded.

Well, Welcome to Modi Inc. Its all plain business and you are here to pay up.

Of course I don't think it's a fair thing for everyone, but the government may have targeted a crypto whale or other big investor in your country.

If this applies to crypto then I'm sure no one wants to hit the threshold. I can't give 30% of my profits to the government while they can never give me free capital. This is absolutely insane for legalization and tax regimes. I just feel that the government is not only concerned with tax revenue but they are trying to prevent big investors from coming to crypto.

30% is really a lot.

afaik, it is not yet implemented so they still have to protest about this high percentage. and agree at certain point where even small crypto users are willing to pay their tax. because if this will be approved as a bill, more then likely, their crypto users will find a way how to avoid paying that high amount of tax. in short, the bill will not be effective and will only be futile. so for the government, they better listen their constituents' suggestion so at the end they are both benefiting from this bill.

On the one hand, indeed, the existence of a crypto tax makes the Indian government look like it supports the legality of crypto in the country, but on the other hand, the tax seems to be used to suppress crypto development for ordinary people who have small capital in investment, just like you, if that is the case. happened in my country of course I also would not want to pay the tax, because the percentage is quite large, besides that the government only wants to know if we get a profit but they will not care if we lose  our assets due to hacking or stolen, and maybe it will be more realistic if the application of taxes is also balanced with the amount of guarantees given to us as crypto lovers, now I read news that many citizens in India who signed an online petition reject the government decision, because according them, the tax is 30 % will only destroy  crypto in india.

A lot really which you could tell that it is already non ethical for the government to impose such percentage even if they do know that they are doing this for tax and economic
development coz everything could be done without imposing this high tax neither on typical industry or just simply focusing on crypto alone which it would really be much
better if they do ban it rather than accepting it but having these tremendous taxes but even though despite of the condition then people could still find ways
on how they would able to avoid this one.

The legalization is good, but the tax rate on transactions is too high.

IMO, if they legalized something, it should be beneficial to the people, charging 30% for a transaction is just too high, that would not help bitcoin to grow as a digital payment for daily transactions, it's not competitive compared to other digital assets. Not sure how they come up with that rate, it looks like it's their way of saying no.

In between the tax and the ban, the tax is better and is more better if a 10 years prison is kept with ban.
From the market we can see that Indian people are happy as they all want to adopt digital assets and because they are more relying on online services and software and for online businesses now the time is for blockchain so the tax will not leave them behind while the tax can leave them behind in the race for modern technology.

The proposal to make ownership of cryptocurrency punishable by up to 10 years in prison (as suggested by one of the top bureaucrats) was outright laughable. According to the latest estimates, there are tens of millions of crypto users in India. Even if 10% of them doesn't agree to forfeit their digital assets, the number would be in the millions. So is the government going to imprison all these people? As far as I know, the total prison capacity in India is only around 250,000. So where the remainder will be lodged? Fortunately, the finance minister turned out to be more intelligent when compared to the bureaucrats and she legalized crypto.

Let me expound on that based on what I understand so far. If you happen to incur a net loss from trading/selling crypto for the current taxable year, you cannot use that to deduct from capital gains on sale of other assets or from ordinary income. Also (I forgot to add this in the OP), you cannot carry over those losses for next year.

There's one positive thing about this that now government is thinking of taking tax which indirectly implies that it's fine for traders and investors to trade in cryptocurrency and the fear of a complete ban on all trades and holding crypto is gone by huge amount. But the tax is a bit too high? Seems so, the clarifications are not very transparent either, maybe I didn't read them in details yet but I think for many, that if the tax is 30% on profit, which means one gets to keep 70% profit which might be fine, specially those who are having huge amount invested since gains on crypto are lots higher when they get up and in the bull market but middle class traders will pay a lot of price and many might quit trading in crypto, all we need is now to wait and see how the regulation is implemented :)

That would be true if people actually were going to pay that tax but I do not think that is going to be the case, people are going to see this and simply ignore the government, they will challenge it to find every single one of them and extract that tax, if they can, this is what governments do not understand, people are reasonable but if you push them hard enough then they will begin to push bask and if they believe that bitcoin is necessary into their lives then they are not going to be happy to pay such a huge tax and will disobey the law.

Yeah that is the logical point which that bureaucrat did not noticed or thought about which made his proposal a failed proposal. The finance minister gave an idea to the state which I myself like in the time when there was a fear of ban of the crypto in the country. Without that greed of the 30% tax given to the state she may not be able to approve her idea. She gave the idea of mutual benefits to the state among the users and the state.

IMO, the 30% tax is less problematic when compared to the 1% VAT that is imposed on all cryptocurrency taxations. And that too in TDS mode. It means that if I want to transfer crypto from one of my wallets to another, then a 1% tax (on the transaction amount) needs to be paid and the details need to be shown in the tax return. For day traders, this is unviable. If they pay 1% as tax, then there is no way that they will end up with a profit. And this also means that crypto can't be used as a medium of payment, as it will be more expensive when compared to credit card or online bank transfer.

With regard to taxes as a whole it is a matter of great relief that our government is taking a progressive stance towards innovation. By introducing taxes the government gives a lot of legitimacy to the industry most people, especially in the corporate sector who are sitting on the sidelines due to uncertainty, will now be able to invest in crypto. Overall this is a positive step for the industry india is also moving towards finally bringing the unregulated and uninterrupted cryptocurrency sector under a regulatory framework the country's finance minister nirmala sitharaman has also suggested a 1% tax cut at source on payments related to the purchase of virtual assets.

being taxed but crypto is now allowed is better than not being tax and no cryptos at all at least they can still earn something and experience if what is using cryptos feels like. Almost all of us here have the same impression about the percentage put on tax, it was too high and this hurts a lot for a small time traders and investors but then again they do not have no choice but to accept it  because at least crypto is now legal on their country.

I wonder why rules like this only happens on a much poorer countries like India but on other countries where i say a bit more wealthy, they do not implement taxes yet on cryptocurrencies. Oh well, let's hope for the greater good on those countries.

I think it's the other way around. Can you name wealthy countries that doesn't have a tax on crypto yet? You'll have to exclude China there. Likewise, can you name those from poorer countries other than India?

AFAIK, developing countries still do not have specific laws on how to treat income from crypto trading/mining. In most cases, it's the trader/investor who voluntarily reports it in his/her tax returns subject to ordinary income tax.

Really this then create problem for the day traders as with each trade they will see 1% deducted from their amount. But there is one solution for that, if they will trade on centralized exchange then I do not think that 1% will be deducted from each trade as on centralized exchanges all the deposits are on one place on the exchange address and we trade with the numbers and is transferred to another address only when we withdraw, if I right!!

When a certain country does impose that kind of regulation then it is likely that any centralized platforms could be possibly be asked with some sort of account history or what but this would be only be possible if you do

get caught on evading tax and really been involved with some in depth investigation which it couldnt really be that avoided that they would be providing all the details but speaking off making withdrawal on other

addresses then its true that you can get hold off those funds but for sure you would really be monitored out and it would really be mandatory that you should pay up tax.

30% is pretty greedy. Together with whatever fees that have to be paid when transferring between these platforms, it could really eat into whatever small profit traders might be earning.

If that state have imposed that kind of rule then they have prepared everything for imposing that rule as I am hearing that government is working from a few years to dal with this field. Sometimes they imposed ban and sometimes they remove that ban. There was also a case in the court about that matter and after that longer time they came up with this decision means that they must have prepared the subject well.

By the way if they do not keep deep eye on every movement of their citizens then they can only monitor those who are depositing, withdrawing with their bank account and those who are using centralized exchanges etc.

And this is where AMLA do sets in but the scope of their responsibility couldnt really break through on other mediums which they would really be focusing more on centralized platforms on which they could possibly
monitored out.
Big profits or small ones it wouldnt matter yet that would surely be a significant cut on your total profits which doesnt really look appealing at all.

This country is still confused about crypto currency. Didn't they try to ban crypto currency again and again? And now they impose a very strict and insane framework that will only cause people to not use or stay away from crypto currencies. The tax rate was set to reap as much as the can from their people. And since income tax from crypto is also the same, people wouldn't want to accept crypto currencies as a form of payment. How are they going to be taxed if they want to use it as currency? Every time they transact, they will be incurring tax?

I am not sure whether this loophole is available. As per the budget speech, all the transactions will come under a TDS of flat 1%. If a day trader is doing intraday trading, then irrespective of whether the coins are actually moved or not, in my understanding it will attract a tax of 1%. Others please correct me in case I am wrong. And each and every transaction needs to be shown in the income tax return. So even if the centralized exchange is used and the coins or tokens are not actually moved, I guess they come under the tax liability.

The Reserve Bank of India, Finance Minister and the CBDC were working together towards maintaining the bitcoin regulation and the effect of tax payment by all involved in cryptocurrency activities, with the 30% tax payment, this will help the government boost its impact on the economy as both synergies to gain a mutual benefit as all crypto activities were progressively in operations and the 30% could constitute the government internal generated revenue (IGR] thereby increasing the role and impacts of the government on the economy

not for sure but the government in India and even in the other countries that adopt crypto will certainly consider it as a helping tool to make money and grow their economy. And the way asking for taxes in every holders is a wise move. However, that it makes sad is that 30% is quite big enough especially for small investors and those who are just about to start.  I think, 20% is favorable and acceptable to the majority.

And I think the government must have to look also the current situation where many are still struggling hard to recover and make a good living. This is not the perfect time to push it but rather to spare some time when we totoally get back to normal.

Juts noticed that tax on profits from investment in gold is 20% (applicable for long term investments, with more than 3 years period). So in a way, the 30% tax on crypto is excessive and hopefully Nirmala might reduce it in the next budget. But short term capital gains tax on gold can go up to 43%, depending on the income tax slab. So in a way, the taxes on crypto is lower compared to that on gold in certain instances. The issue here is that long term gains are taxed at a rate that is equal to short term gains.

I think such a law was set by those who don’t like cryptocurrency. And it’s quite possible that they have done this as a way to discourage people from investing in cryptocurrency. But their plans are not really going to work because this would only make a lot of people to leave centralized exchanges and start moving to decentralized ones.

The tax amount is quite big and shouldn’t be what people are expected to pay for investing in cryptocurrency. It’s quite clear that anyone who have set such a law is someone who doesn’t like crypto currency, because I don’t see why anyone would be expected to pay as much as 30% tax For profits that are made through cryptocurrency.

Some other people think about its there way to eliminate bitcoin on their country since using it will be more expensive to them but lets also not eliminate the bright since maybe this is their way to study how bitcoin could help their economy and if they find it useful then many people will protest to lower its tax then maybe it can get a chance to have less tax percentage to be taken on their citizens.

Crypto-backward countries like India have absolutely no plan what they are doing and seem to be flip-flopping on the entire regulatory issue. There is absolutely no need for unfair tax on crypto incomes. It seems like this kind of regulation serves to coerce crypto people into going against the whole principle idea of why crypto exists in the first place.... This will definitely backfire on India in the long term.

At some point, everyone will understand that crypto is out of governments control and the control is only in their own minds of the people. Once that happens, we will be free.

Without a doubt this is better than a ban but the tax is still too high, if anything it looks punitive to me, as if the government is trying to stop people from using cryptocurrencies by purposely charging a huge tax to it, I think that eventually they will lower the tax if they are smart and recognize that this industry is unstoppable and that they better get something out of it, something that I do not think will be possible with a 30% tax as people will simply hold their coins and avoid producing any taxable event.

Nobody is saying that paying tax is bad, of course we are all meant to pay tax from our income because that is what helps the government to make money and also grow economy and make the country a better place. But aside from that, I think the government should also learn to be making rules that will also favour the people and not be kind of oppressing.

And the other thing is that I think this kind of tax should have level, everyone really shouldn’t be paying that same amount, because not everybody earns that much from Bitcoin. And there are people that doesn’t even have much to invest at all. So they really should look into it.

Neither they are testing it out whether they are minding about their economy or would really be just that normal that they would go against decentralization but if they do then they have banned it on the

first place but they did not but rather imposing 30% tax which is indeed really high and for those people who do reside on this country then it  would really be a bad news.

Somehow but they could really find out ways or methods on dealing with that problem but that wont be easy.

If the intent is to eliminate Bitcoin usage, then it is never going to work. For the government, one of the issues with Bitcoin taxation is similar to what they have with other capital assets. These assets can't be taxed unless they are sold. So if some user purchases Bitcoin and keeps them in his wallet for 15 or 20 years, there is no way that the government can ask him to pay taxes. Senator Ron Wyden in United States has proposed a bill that would tax unrealized capital gains for the first time in history, but such moves are not expected from the Indian government.

what is the average tax rate on income in India? - that would help in evaluating if 30% on crypto currency is much or not.

The top most bracket is 43% on regular income. That said, it should be noted that less than 2% of the Indian population pays any form of income tax. There are a lot of loopholes. Farmers are exempted from income tax, no matter how large is their income. The same goes for residents of certain states such as Mizoram. However gains from capital assets are being taxed at a concessional rate. For example stocks, if held for more than 12 months are taxed at a rate of 10% (and 15% in case they are being held for less than that duration).  

This is too high, damn! They are really trying so hard to discourage people from getting involved in owning crypto assets with such ridiculous high-income tax, I guess it is up to the citizens to decide if they are willing to accept regardless of the high tax imposed by the government, whether big or small investors will feel the same impact of 30%, and the moment people are okay with this I don't see it changing, 10 - 15% would have been reasonable.

Well, if Indian People don't like it they wont pay 30% income tax because they will see that regulation is ridiculous. We should be grateful if we lived in a country that still didn't take any tax from crypto income and instead they make it legal for transactions and commodities. I bet many people are okay with that regulation because they didnt pay that tax

Even though that this is totally painful in the pockets of Indian crypto investors, traders and enthusiasts, it’s still much better than an outright ban like what China and other anti-crypto countries did. Russia also took a positive stance by regulating it and recognize them as “currencies” instead of banning it in the entire country which was proposed by the Central Bank back then.

And also back then, the India government has proposed a ban for their citizens to hold and trade cryptocurrencies. It even includes imprisonment if someone gets caught for holding Bitcoin and other cryptocurrencies.

At this state, the “change of heart” was real and India and Russia are setting a great example.

This is really ridiculous but atleast they see it been regulated and maybe there will be changes will come in future towards it, Maybe for now they should fight and propose to the government to lower down the tax rate so that they can use it without any worries that there is a huge burden to them by using this currency. Anyways we don't know what will happen but maybe we can see some consideration on this issues.

A 30% income tax in digital asset is ridiculously high I guess but yeah atleast the government allowed their people to use the digital assets. Though India's government did not want to specify the word cryptocurrency instead they used digital assets it's already good to know that they can now used their digital assets legally. I just do hope that someday digital assets will be also legally adopted here in my country so I can used it legally to purchase goods and services.

I don't know what is in the mind of the Indian government at this time by applying a fairly high tax, in fact the intention of the Indian government to apply taxes is quite good because with the tax investors will be a little free to invest, because with this tax, of course crypto legality is at least has been recognized in India, but with the high taxes it is clear that if the Indian government actually has a hidden intention to shut down crypto in the country, of course with a 30% tax, it will make small investors and people who want to try to invest crypto more choose to quit and get out of the world of crypto than they have to pay quite high taxes and entangle their necks later.

30% is absolutely too high to impose on citizens, this will really deep a hole in investors funds should they accept this imposition, I agree, it is a good thing the government has decided to give crypto assets a chance to be operated legally but imposing such high tax is not helping the citizens, the government needs tax for economic growth but there are fair ways to do this not to stress the taxpayer financially,
They have to reconsider this percentage. Hopefully, the Indian citizens will speak against this unreasonable amount and request for a fairer tax.

It is too high. If the Indian government really want to make money from crypto, they should go after institutional investors that have also started investing in digital assets, like banks for example. Let the citizens trade without too large a tax. The government has shown what it's really after - income. First they tried to make it illegal and when they realized they can't stop it, they slapped a heft tax on it.

     It is quite sad to look at this since the people of India are already suffering enough as it is, why should they burden the ordinary people with such things? Lots of people in India are forced already to do unspeakable things along with disregarding proper sanitations just to make ends meet. This is no joke, I know this because I have a friend that is Indian and he says that life is really not easy for the politicians there (according to him) are very corrupt and only care about their pockets more than anything else. He also said that some common people are just beginning to find their way into this industry. I really feel sad for the majority that has their silver lining rid off of them because of such greed from the politicians that they even target an industry that is still in it's infancy specially in their country. :/

I think it’s way better than getting criminal acts imposed on you for possessing the crypto currencies. I read somewhere that Russia is planning to take legal actions on the Russians who posses more than 8,000 USD in crypto currency. I see that India is just imposing proper taxes on the crypto currencies and they are not banning or taking any heavy charges for possessing the same. In fact it’s amazing that highly populated country like India is doing this. Their government is being reasonable for the future. They will both trying to gain more income and also letting their people to enjoy it.

Are you sure only 2% of the population is paying any form of income tax. With a billion population and you are saying less than 3 million people pay their income tax which is really absurd, from where you got this calculation. There might be loopholes in the system and every country will be having those loopholes but to say that just 2% of the population paying the tax is not true even according to simple google search.

A fixed 30% tax on income from digital asset is absurd, since the term loopholes were used, people will find a solution for that as well if some of them are true.

But there were talks about those taxation which they do have debates and argumentation about it.
https://timesofindia.indiatimes.com/business/india-business/taxing-crypto-doesnt-mean-it-is-legalised-fm/articleshow/89514617.cms

Bitcoin was never been legalized on India which does simply means that it couldnt be taxed.Wondering on how they would really be able to do such thing.

One country has a single asset of 30%, from tax revenues from one element, I dare say that country can prosper its people Economically, if the tax authorities are honest and don't do anything corrupt, not to mention the income tax on the other hand.

If the Indian Prime Minister's proposal is legalized against digital currency assets, the economy, welfare india will have good economic value in the world and rise from poverty, 30% tax is the same as investing in one company, that's an example.

I understand india has different level of society, i only have opinion only one 'fairness' if it has 30% tax source from digital assets.

They are not legal yet but the government can impose rules in regard to crypto taxations. And this simply will apply to establishments and casinos that are accepting this. But as long as you don't declare holding/investing any cryptocurrency, I think we don't have to worry about it.
However, this proposal is still on the debate as to whether it will take effect or not. But this 30% tax collection to every holder isn't really a fair amount especially for small businesses and doubted if this will be officially imposed in the situation that Bitcoin isn't legal yet.

Such a hypocrite ..

They try really hard to ban bitcoin and suddenly move to tax everything involve crypto with insane amount.
They still trying , i knew it ...
Since they do aware that stopping bitcoin is like a mission impossible then they are doing this no sense.
F*ck government .. they are blood sucker , ain't helping at all making everyone's life even more harder.

Those politicians do not really know what they are doing with those crazy laws that they are trying to implement, a tax of 30% is such a bad idea, but the law being proposed on the US is completely crazy, can you imagine the taxes people will have to pay just because their houses went up in value if such a tax was implemented? And even if they somehow excluded houses that kind of tax will create a negative incentive and people will being to avoid investing in anything as the tax is too punitive, weakening the economy at the worst possible time.

For now we arent seeing these things on other countries but i wont get surprised that sooner or later they would really be ending up on applying it whether 30% or more or something like that.

For now the best thing those crypto earners living on India wouldnt really be having no choice as long they would be touching centralized platforms or services then
theres no way that they couldnt really able to avoid if they've been asked for some taxation.

Seeing other tax brackets, 30% on crypto currency is definitely too high.

How about personal income tax rates?


Top 10 Countries with the Highest Personal Income Tax Rates - Trading Economics 2021:
Ivory Coast - 60%
Finland - 56.95%
Japan - 55.97%
Denmark - 55.90%
Austria - 55.00%
Sweden - 52.90%
Aruba - 52.00%
Belgium - 50.00% (tie)
Israel - 50.00% (tie)
Slovenia - 50.00% (tie)
Top 11 Countries with the Highest Corporate Taxes - Trading Economics 2021:
Puerto Rico - 37.5%
Suriname - 36.0%
Chad - 35.0% (tie)
Equatorial Guinea - 35.0% (tie)
Guinea - 35.0% (tie)
Iraq - 35.0% (tie)
Malta - 35.0% (tie)
Sudan - 35.0% (tie)
Zambia - 35.0% (tie)
Brazil - 34.0% (tie)
Venezuela - 34.0% (tie)


Source: https://worldpopulationreview.com/country-rankings/highest-taxed-countries

that 30% would really be just a child's game.  :D

^^^ Oilacris, yours is not exactly an apples to apples comparison. You are trying to compare tax on capital gains, with tax on ordinary income. Both are different. In India, the highest tax slab for income tax is 43%, which is much higher than the 30% rate that is applicable for capital gains from cryptocurrency. But it is definitely higher than the tax rates applicable for other capital assets. For example, profit from gold is taxed at a rate of 20%, while that from stocks and mutual funds is taxed at a rate of 10% in India.

Just an update on this bill:

The Finance Bill 2022 (https://www.indiabudget.gov.in/doc/Finance_Bill.pdf), which includes proposals for the taxation on income from digital assets, is scheduled to be passed today (6PM onwards - India time). From articles I've read, no major changes to the bill is expected and this could be approved by the end of the day.

You can find the schedule here (http://loksabhaph.nic.in/Business/ListofBusiness.aspx) (change date to March 24).

Nothing going to change, maybe they'll add some statements of blockchain and it's increasing usage. This time the government will try to connect each and every form of tax increase with the oil price. The price that hasn't increased for a long have begun to increase after five state election results. Everything within the country is planned in a way to support the government, so 30% taxation on capital gains will continue or else it'll change to 28%

The government is in a tricky position right now. For the last 8 years or so, they benefitted enormously from the low crude oil prices. The tax on oil products was kept at a very high level and this allowed them to lower taxes on other sectors. But with crude oil trading at close to $120 per barrel, they can't keep the tax rates at the same level. So they are now looking to other sectors and I won't be surprised if there are further tax hikes in the crypto sector. There is a widespread belief in India that crypto investors are making good profits and they may be targeted by the government to fill the treasury.

30% income tax is too high for us, probably Indian investor will not be satisfied with such a tax. But the legitimacy and taxation of crypto will always go hand in hand. I believe that taxation is a must for every citizen because this will help the national economy develop and be more sustainable.

When you have a dispute or involve crypto scam, the government will be the one to help you out so paying taxes is an obligation.

Bump for an update:

There are ongoing reports (https://www.bloomberg.com/news/articles/2022-06-22/india-panel-said-to-weigh-sales-tax-on-cryptocurrency-next-week) that some ministers in India are planning to add another tax on cryptocurrency transactions. It's called Goods and Services Tax (GST) and they might follow the 28% which is the highest rate.

If they decide on adding that, Indian crypto investors/traders will pay three different taxes:

• 30% Capital Gains Tax
• 1% Tax Deducted at Source
• 28% Goods and Services Tax