That's interesting, the capital gains tax in India is certainly much lower than in the US. In the US, short term gains can be taxed as high as 35%, depending on your income.
There may be some other advantages to our system, however. Here are a few:
* The stock tokens can be traded or exchanged off-platform, given as gifts, or used as prizes on other crypto sites--all things you cannot do with traditional stocks
* Anyone can trade on Reflection. I would assume stock brokers in India have restrictions on who can open an account...
* We will accept trades for any dollar amount, so you could buy a few dollars worth of an expensive stock
* We will initially support 16 hours per day stock trading and 24 hours per day ETF trading, and ultimately we expect to support 24 hours per day stock trading as well
* While you must still pay tax on your profits and the 1% TDS, we are not required to report your individual trades, so there is some additional privacy
* When we rollout short selling and margin trading, the rules can be more lax since we won't be subject to the same restrictions as traditional brokers
These are just some of the ideas that come to mind...
-Peter Spiro
You are correct that there is a 1% TDS. We are required to collect this tax upon sale of the stock tokens. I can't say whether or not the other percentages are correct as I'm not an expert on India taxes.
I actually meant to ask for a bigger scope and not limited to India, as you stated that India is your first marker and you'll work your way
to operate globally. But sure, let's talk about India first before moving to the bigger scope.
I took a quick glance at the arcticle you provided, and am I correctly understand that VDA applies a 30% tax plus 1% holding tax, while stock trading --the conventional ones-- are subjected to 10-15% tax?
According to several articles I looked for, like
this one and
this one, we can quite confident that tax for capital gain in india is 10-15% depending on the holding terms --anyone more familiar with this system and rate are welcome to give their input.
Let's say that the tax is 15%, wouldn't it impose a great disadvantage for the Indian to invest on your business model? Not only they're not entitled to the shares they bought --as it'll be owned by Reflection-- they also subjected to a far higher taxes buying the shares in VDA than in actual stock holding.
