Hello and Namaste Everyone
Taxation is the important part and as responsible citizens, we should always pay off whatever the liability is as part of the taxation. There are different types of taxes applicable in India but income tax is more important because as individuals we need to pay it off to the government. If you are a salaried employee then there are high chances that your tax will be deducted by the employer. This is the common and standard practice for the salaried employee. The applicable tax is deducted by the employer and the employee is not required to take any action. This is only applicable to employees who are working in the private or the government sector. If you are self-employed or a professional or even a businessman then you will not be getting this facility.
You need to calculate your taxes by yourself and of course, you can always get help from any agency or associate. As an employee government has opened the option to claim some deduction as part of the exemption limit or some standard reduction. However, this is not applicable in the case of business because the tax treatment is different. Crypto taxation is completely different in the country and the government does not provide any option to claim the expenses against income from Crypto.
In general scenarios, the government has created different slabs but for crypto it's flat. I mean to say whatever you earn through the cryptocurrency will be taxed flat 30% and there is no slab applicable. This is a problematic part of crypto taxation and it is the same with the gambling sector. If you earn any money through gambling, you need to pay a 30% tax. This percentage is very high and because of this people are not doing so much trading in crypto. Indian exchanges have gone through a big reduction in their overall revenue because the trading volume reduced by over 90%.
Some users started trading in international exchanges because as per them TDS is not applicable there. while tax is payable TDS is another problematic component. Many exchanges hired shared their revenue figures with approximate values showing the reduction in their trading volume.
Now some of the big exchanges in India are expecting the government to reduce the tax percentage for crypto income. This is going to be good if it happens but I doubt it. I doubt this because, in the last few years, the way the Indian government has created things for Crypto is not done with a positive sentiment. Nobody can guarantee what they are going to do but if you look at the historical situation then it is not expected.
Indian crypto unicorn CoinDCX claimed that the 1% TDS on crypto transactions introduced by the Indian government in 2022 has had a detrimental impact on digital asset trading, rendering it ineffective. The tax was introduced in July 2022 to track the buying and selling of cryptos in India. However, the levy has driven 95% of Indian crypto trading volumes to overseas platforms that are difficult for local officials to monitor.
Now the Indian government has been trying to discuss crypto in the open forums for some time. They tried to draw a picture that they are technology friendly and they are exploring the blockchain. We are also trying to create a global framework in which more countries should be part. For sure they are going to make things difficult for the crypto industry this way. From a trader's point of view, the reduction in taxation can help and also the reduction in TDS is required.
TDS is known as tax deducted at source and this amount can be refunded if there is no tax liability. Even if it is refundable also it affects the capital amount because with every trade one percent is taken by the exchange as part of the tax deducted at source.
Thank you so much
Stay Safe
