Good morning community, welcome back!
A few days ago, I was reading a few articles on Hive and my eye jumped on this article (@indiaunited/india-leo-weekly-contest-100-leo-up-for-grabs) about a new contest started by the Indian Hive community. I would first like to thank the Indian Hive community @indiaunited who, in collaboration with Leo Finance, gave the opportunity to participate in this contest.
Since I have several Indian friends and I love the food (whenever I can, I go to the Indian restaurant in my city), I decided to dedicate an article to it as well.
Already months ago, I had read some news about India's relationship with crypto. Today we are going to look at what has changed in the last few months and why Indians are not all happy with this news.
First, we must consider a fact that I never expected. If you don't know, India ranks first in the world in the number of users who own crypto. In fact, we are talking about more than 100 million users, which is about 7.50% of the population, almost four times the number of users in the United States, which occupies the second place in the world with about 30 million users.
Cryptocurrency taxation in India went into effect on April 1st, 2022, requiring companies and individual investors to pay a 30% tax on profits received. In addition to capital gains taxation, Indian citizens will also be forced to pay a 1% withholding tax, which went into effect July 1st, 2022.
Tax Deduction at Source (TDS) in the case of cryptos will require investors to pay for every transaction, including when cryptos are purchased, transferred to a digital wallet or used to purchase non-fungible tokens (NFTs). Another significant impact on investors is the "asset loss quarantine," which means that investors are no longer able to offset a loss from one crypto against profits from another. Indians also are not allowed to deduct expenses or allowances when calculating the income of cryptocurrencies, except for their acquisition cost. Many fear the flight of domestic cryptocurrency entrepreneurs and startups to progressive countries including the UAE or Singapore.
"Onerous taxation poses a challenge for the cryptocurrency industry in India," said Sumit Gupta, CEO of CoinDCX. "A 30% tax rate will certainly stifle growth and we have already seen many cryptos leave India."
Even in past years, India did not fare well from a crypto perspective. There was even talk of banks banning crypto. A few years later certainly the crypto taxation situation in India is still not favorable, and I think many investors are considering moving to other, more crypto-friendly countries.
I hope that in the future the situation may improve so that even the Indian community may not be so penalized on investment in this sector.
It was a pleasure to give a brief introductory overview of the crypto situation in India.
Don't forget to read this article (@indiaunited/india-leo-weekly-contest-100-leo-up-for-grabs) and participate in the contest too!
Do you live in India? I would love to read in a comment your opinion about this situation in India.