Wait more time for crypto as FM takes a ‘well-considered view’ even with extra TDS

Looks like the Indian crypto community will have to wait some more before India adopts cryptocurrencies.

In this year’s Union Budget, Finance Minister Nirmala Sitharaman proposed several steps for a more digital India, one of them entailing a 30% tax on income from crypto and NFTs. Another highlight was the intention of introducing a digital Rupee by RBI starting 2022-23.

Both announcements were welcomed by the crypto community as they legalise the status of crypto in India.

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While this spoke of a gradual acceptance of crypto in India, last week, the FM said that India will not rush into any decision on cryptocurrencies and will take a ‘well-considered view.’

This means the crypto community will have to wait some more before India adopts cryptocurrencies. Crypto members have been looking forward to a regulated ecosystem.

Considering the active participation of Indian investors in crypto, and the volumes traded, we are sure that the government will work towards bringing in regulations, absence of which might divert the activities towards black market which will hamper the economy

“Considering the active participation of Indian investors in crypto, and the volumes traded, we are sure that the government will work towards bringing in regulations, absence of which might divert the activities towards black market which will hamper the economy,” said Paul Rogash, CEO and Founder, EarnU, a cryptocurrency based fantasy sports platform.

A 30% tax on returns or profits made from virtual digital assets was also introduced in the Union Budget, another welcome move from the Government of India. Now, interest earned from foreign crypto platforms can attract a 20% TDS. According to ET, the tax department is considering an additional TDS and equalisation levy on these type of transactions and interest income generated by Indians.

It would be compelling to witness the effect of the implementation and clarity given on TDS by the government

“Since the industry and innovation is very new, certainly TDS would be a subject of contemplation,” says Rogash.

“Currently, as per the speculations this is being mooted upon on draws from foreign platforms only. Nevertheless, all this together indicates that the government is mulling over legitimising the digital assets,” he says with hope.

He also adds though that the scope for opportunity shouldn’t be thwarted.

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“However, very heavy taxation might work otherwise. We expect a framework that is not so tight that it leaves little scope for the industry to thrive. It would be compelling to witness the effect of the implementation and clarity given on TDS by the government,” he says.

EarnU, which entered the Indian market a few months back, has been eyeing some 10,000 Indian users every month, even betting big on this year’s IPL season.