[2021-09-11] India's upcoming cryptocurrency law seeks to balance stability and

[Woodie]

India's upcoming cryptocurrency law seeks to balance stability and growth with a distinct approach: Jayant Sinha

NEW DELHI: In an event organised on September 7 by the Blockchain and Crypto assets Council (BACC) of Internet and Mobile Association of India (IAMAI), Jayant Sinha, the chairman of India’ s Parliamentary Standing Committee on Finance, said that India's cryptocurrency bill will have a distinct and unique approach for crypto regulation.

He confirmed that India’s crypto policies will not be along the lines of nations like the U.S, Japan or El Salvador as there is no full capital account convertibility in our country. Full account convertibility allows the exchange of a nation’s currency with foreign currency without any restrictions on the amount.
Sinha explained that considering India’s different set of challenges and circumstances, the crypto policy will work in the given direction.

The crypto policy of India will be dominated by concerns of national security. The minister emphasised on the need for strong vigilance against the misuse of cryptocurrencies and crypto assets for terror financing and domestic security threats.


* Indian crypto policy will strive to balance stability and growth in relation to the larger picture.

In the same event, former Reserve Bank of India Governor, Rama Subramaniam Gandhi said that once cryptocurrencies gain acceptance, the same rules that govern commodity exchanges could apply to them.
India's upcoming cryptocurrency law seeks to balance stability and growth with a distinct approach: Jayant Sinha - Times of India
Readmore  https//timesofindia.indiatimes.com/business/cryptocurrency/blockchain/indias-upcoming-cryptocurrency-law-seeks-to-balance-stability-and-growth-with-a-distinct-approach-jayant-sinha/articleshow/86099305.cms

All these regulators will always sight terrorists financing but they forget that fiat is actually the worst alternative as compared to crypto which has all transactions recorded on the public ledger for all to see.

[SFR10]

India's cryptocurrency bill will have a distinct and unique approach for crypto regulation.

He confirmed that India’s crypto policies will not be along the lines of nations like the U.S,

I do know we're still missing most of the details, but from what I've seen and understood, their cryptocurrency bill isn't that unique.

All these regulators will always sight terrorists financing but they forget that fiat is actually the worst alternative as compared to crypto which has all transactions recorded on the public ledger for all to see.

Unfortunately, it's a lie that they continually tell everyone so they could have a perfect excuse to regulate it.

[bbc.reporter]

@Woodie, @SFR10. I reckon this is why there are mixing services. They are tools to preserve privacy for all tranparent blockchain transactions similar to bitcoin.

In any case, government only wants control and their share through what they can tax in the cryptospace. They will again use for public protection as the argument for regulation. It always fear they use hehe.

[zanezane]

@Woodie, @SFR10. I reckon this is why there are mixing services. They are tools to preserve privacy for all tranparent blockchain transactions similar to bitcoin.

In any case, government only wants control and their share through what they can tax in the cryptospace. They will again use for public protection as the argument for regulation. It always fear they use hehe.

Isn't crypto not taxable because a lot of my friends tell me that because there was a trend in my country on blockchain games that lead to many speculating that soon it's going to be taxed and so the panic ensues and they calmed their followers that it's unlikely that crypto is going to be taxed so the government can't really do much if people intentionally hide them.

[bryant.coleman]

For the Indian government, the number one concern is the usage of Bitcoin and other cryptocurrencies by the freelancers to receive payments from foreign employers. Every now and then, they try to crack down on freelancers (because the regular IT companies pay around 70% of their profit in the form of various taxes and currency conversion charges, and with freelancers this % is much lower). PayPal and other payment processors was forced to stop its operations in India due to continued harassment. But with Bitcoin, the government is really powerless. They can't track how much money is being received by the freelancers. This is the reason why they came up with a very authoritarian law a few months back. But due to widespread protests, they couldn't table it in the parliament.

[NeuroticFish]

But with Bitcoin, the government is really powerless. They can't track how much money is being received by the freelancers. This is the reason why they came up with a very authoritarian law a few months back.

That's correct. Usually the main reason behind stronger surveillance is not to avoid terrorism funding, it's more to find more easy sources for tax. And here it looks to be exactly the case.
This this kind of law many people working for Bitcoin will have to declare the coins and - in a way or another - pay income tax for them. And the normal, honest people will comply. Easy money for govt.

[bbc.reporter]

@NeuroticFish. However, I reckon this might also arguable. Cryptocoin transactions are also easier to hide with all of these privacy tools available for all of us users. I reckon cryptocoin mixers might increase in usage for tax avoidance hehehe.

[newwest]

Reading the news of before few years, India stands was always against it and wanted to ban it. But now this is a good move in a way better than blanket ban. Though what laws and how it is proposed will need to see but surely if they can allow and accept it, things will change for the country as well in the crypto world as India as well attracting lot of users in lockdown times.

[NeuroticFish]

@NeuroticFish. However, I reckon this might also arguable. Cryptocoin transactions are also easier to hide with all of these privacy tools available for all of us users. I reckon cryptocoin mixers might increase in usage for tax avoidance hehehe.

...and if this is getting used widely, they'll start targeting (with or without success) the mixers.
The thing is, the mixers aren't that much used; the "mixers will mix your honest coins with drug money" narrative is still catching, no matter how much we try to debunk it.

Also, if the law is well thought (I didn't read it) then the tax will happen when people exchange to fiat, which may be allowed only on KYC platforms.

So I expect that - especially if the tax is clear and not too big - people will prefer complying.

[Sithara007]

That's correct. Usually the main reason behind stronger surveillance is not to avoid terrorism funding, it's more to find more easy sources for tax. And here it looks to be exactly the case.
This this kind of law many people working for Bitcoin will have to declare the coins and - in a way or another - pay income tax for them. And the normal, honest people will comply. Easy money for govt.

Being an Indian resident, I need to say that it is not that simple. First of all, Bitcoin is not 100% legal in India. So if I mention that I received profit from Bitcoin trading in my IT return, then there is a good chance that they will start legal action at some point in the future. And secondly, in order to receive income from abroad (for freelancing), you need special license. This is done in order to limit the IT-related jobs to the bigger companies. Freelancers usually don't have such licenses, and they sometimes face issues due to this. The government also takes away a large chunk in the form of currency conversion charges and other fees. If freelancers receive the salary in the form of BTC, then the government loses all this money.

[NeuroticFish]

Being an Indian resident, I need to say that it is not that simple. First of all, Bitcoin is not 100% legal in India. So if I mention that I received profit from Bitcoin trading in my IT return, then there is a good chance that they will start legal action at some point in the future. And secondly, in order to receive income from abroad (for freelancing), you need special license. This is done in order to limit the IT-related jobs to the bigger companies. Freelancers usually don't have such licenses, and they sometimes face issues due to this.

Woah, it's indeed complicated.   
Yeah, the legislation is stupid and instead of fixing it, they make it worse. In my country, especially in IT, the legislation is pretty lax because they've figured out that it's better to have people stay and pay *some* tax than leaving the country completely.
Limiting and over-limiting, special licenses, ... only make people stay just long enough to buy a plane ticket, one way only.
Oh well, sorry to hear...

And indeed, if it stays like this, it's not only about tax avoidance, it's also about avoiding other laws too...

The government also takes away a large chunk in the form of currency conversion charges and other fees. If freelancers receive the salary in the form of BTC, then the government loses all this money.

Well, they can still over-charge and over-tax Bitcoin to fiat exchanging, but yeah, it's more than this... 

[cafucafucafu]

Are they trying to backtrack on their previous decisions now?

Unfortunately, it'll be way too late. The wave of institutional adoption has already gone past and India has missed out big time.

It's funny seeing all of these governments change their minds about crypto so quickly as soon as they realize that they can make some bucks from tax revenue in this area... They should have had the foresight to realize that this was an eventuality.

[bryant.coleman]

Woah, it's indeed complicated.    
Yeah, the legislation is stupid and instead of fixing it, they make it worse. In my country, especially in IT, the legislation is pretty lax because they've figured out that it's better to have people stay and pay *some* tax than leaving the country completely.
Limiting and over-limiting, special licenses, ... only make people stay just long enough to buy a plane ticket, one way only.
Oh well, sorry to hear...

And indeed, if it stays like this, it's not only about tax avoidance, it's also about avoiding other laws too...

Well.. your post sums it up. India is the country with the worst brain drain problem in the world. None of the other countries come anyway close. And you have detailed the reasons very well. The tax laws are biased against the ordinary employee. They are overworked and overtaxed and as a reason at the first available opportunity, the Indian employees try to migrate either towards the western nations, or to the middle east. Those who remain are mostly those who don't have the required quality. And in due course of time, these useless guys become managers and they harass intelligent people who work under them. As a result, even more people pick up their bags and leave India. This has been happening for three decades.

[TalkStar]

Being an Indian resident, I need to say that it is not that simple. First of all, Bitcoin is not 100% legal in India. So if I mention that I received profit from Bitcoin trading in my IT return, then there is a good chance that they will start legal action at some point in the future. And secondly, in order to receive income from abroad (for freelancing), you need special license. This is done in order to limit the IT-related jobs to the bigger companies. Freelancers usually don't have such licenses, and they sometimes face issues due to this. The government also takes away a large chunk in the form of currency conversion charges and other fees. If freelancers receive the salary in the form of BTC, then the government loses all this money.

This is not like this that only India is trying to implement rules about crypto currency payment or investment. If I am not wrong then the list of countries is enough longer and all they are trying to get the best regulatory way. Government have always attention on reducing black money transaction and how to stop illegal transaction. Its been a long time Indian governments is observing their citizens activity with crypto and no doubt that crypto world will get a massive boost if a country make crypto legal who have 1 billion population. Although its not that easy for them when they are continuing their fight against corruption and black money. I don't think Indian government or court will publish early decision about crypto but a large number of people in India have already introduced with bitcoin. Even still you will get a good number of new crypto projects who have Indian citizen on their team and they are working with this for a long time.

Every countries government always give priority to Tax and Indians are not different from here but important thing is that how Indian government open the crypto space for their people with strict control. If they can't control the transaction then you can expect that billions of illegal and black money holders will get a chance to convert their asset.

[Sithara007]

This is not like this that only India is trying to implement rules about crypto currency payment or investment. If I am not wrong then the list of countries is enough longer and all they are trying to get the best regulatory way. Government have always attention on reducing black money transaction and how to stop illegal transaction. Its been a long time Indian governments is observing their citizens activity with crypto and no doubt that crypto world will get a massive boost if a country make crypto legal who have 1 billion population. Although its not that easy for them when they are continuing their fight against corruption and black money. I don't think Indian government or court will publish early decision about crypto but a large number of people in India have already introduced with bitcoin. Even still you will get a good number of new crypto projects who have Indian citizen on their team and they are working with this for a long time.

Every countries government always give priority to Tax and Indians are not different from here but important thing is that how Indian government open the crypto space for their people with strict control. If they can't control the transaction then you can expect that billions of illegal and black money holders will get a chance to convert their asset.

Rather than crying about tax evasion all the time, the governments should first analyze the reason for that happening. In case of India, the top tax bracket is 43% and the biggest joke is that only 2% of the total population pays income tax. Others are exempted, using various loopholes. Now on top of that, the government hasn't fully legalized freelancing and related professions. Freelancing (when the employer is from outside India) is a big grey area in India, as far as tax legality is concerned. Now let's come to cryptocurrency. The official stance from the government is that cryptocurrency transactions are not legal, but anyone who has received a profit from them needs to pay tax. Now who will be stupid enough to do that?

[Kong Hey Pakboy]

I don't hold on too much with this one, I think that this is just another ON in the on and off relationship of Indian government with bitcoin, pretty sure that we're going to see this law getting amended or changed, something like that.

[Ozero]

For the Indian government, the number one concern is the usage of Bitcoin and other cryptocurrencies by the freelancers to receive payments from foreign employers. Every now and then, they try to crack down on freelancers (because the regular IT companies pay around 70% of their profit in the form of various taxes and currency conversion charges, and with freelancers this % is much lower). PayPal and other payment processors was forced to stop its operations in India due to continued harassment. But with Bitcoin, the government is really powerless. They can't track how much money is being received by the freelancers. This is the reason why they came up with a very authoritarian law a few months back. But due to widespread protests, they couldn't table it in the parliament.

The good news is that the Indian government finally decided to legalize cryptocurrency. On what conditions is the second question. The main thing is legalization. When she begins to walk legally in the country, gradually the conditions of her walking can be changed, this is a common practice in relation to everything new. In addition, we do not know under what conditions of walking the corresponding laws will be adopted. After all, this topic is still being discussed.

[Sithara007]

The good news is that the Indian government finally decided to legalize cryptocurrency. On what conditions is the second question. The main thing is legalization. When she begins to walk legally in the country, gradually the conditions of her walking can be changed, this is a common practice in relation to everything new. In addition, we do not know under what conditions of walking the corresponding laws will be adopted. After all, this topic is still being discussed.

There is no final decision yet. Some of the members of the cabinet want to tax cryptocurrency transactions and make them legal, while some others including the RBI governor want to impose a blanket ban. So there needs to be some compromise in between and I don't think that the final terms are going to be very favorable for the cryptocurrency users. Don't forget that this is a country where e-Cigarettes, vibrators and satellite phones are banned. Do you guys really think that they will be progressive when it comes to cryptocurrency?

[cr1776]

The good news is that the Indian government finally decided to legalize cryptocurrency. On what conditions is the second question. The main thing is legalization. When she begins to walk legally in the country, gradually the conditions of her walking can be changed, this is a common practice in relation to everything new. In addition, we do not know under what conditions of walking the corresponding laws will be adopted. After all, this topic is still being discussed.

There is no final decision yet. Some of the members of the cabinet want to tax cryptocurrency transactions and make them legal, while some others including the RBI governor want to impose a blanket ban. So there needs to be some compromise in between and I don't think that the final terms are going to be very favorable for the cryptocurrency users. Don't forget that this is a country where e-Cigarettes, vibrators and satellite phones are banned. Do you guys really think that they will be progressive when it comes to cryptocurrency?

They probably will be very progressive when it comes to crypto - at least "progressive" as it is embodied in the US.  And in the US "progressive" really means "regressive" where they want power and control.  They regress back to the old Democrat position that your life is not your own and that it belongs to someone else, as in the old south, today though the Democrat party is a bit more subtle about it and uses flowery language like "equity" and "fairness" without ever defining those terms.  At root they go back to their old position that they can take what they want by force and you have to claim to like it.  BOHICA.