India’s Crypto Dilemma: High Taxes and Unchanged Regulations
India’s Ministry of Finance has made it clear: there can be no changes to the present cryptocurrency tax framework anytime soon. This announcement is a little bit of a letdown for those hoping for more favorable crypto regulations. Additionally, the federal government is not planning to green-light Bitcoin or crypto ETFs within the foreseeable future.
No Change to the 30% Crypto Tax
Recent reports confirm that India’s Ministry of Finance is sticking to its guns on crypto regulations. The 30% tax on profits from crypto stays firmly in place, with no signs of a shift. Also, any dreams of seeing Bitcoin ETFs are being placed on ice for now. Crypto India, a well known platform on X, highlighted this development, drawing attention to the country’s strict stance on crypto.
Crypto India recently tweeted:
BREAKING: 🇮🇳 Ministry of Finance says there are currently no plans to revise crypto tax rules or permit Bitcoin/crypto ETFs. pic.twitter.com/VHmFGkzabF
Notably, this decision solidifies the present tax arrangement, which incorporates a 30% tax on crypto gains and a 1% Transaction Digital Asset tax on trades over INR 10,000. The government just isn’t leaning towards approving any Bitcoin or crypto Exchange-Traded Funds (ETFs) soon, showing a cautious approach to cryptos.
Speculations and Reality in India’s Crypto Scene
Despite some buzz about India potentially warming as much as Bitcoin, this latest news dims the prospects of a BTC ETF anytime soon. As reported by CoinGape, a representative from the ruling party had recently sparked interest by mentioning the thought of a Bitcoin Reserve, making many wonder if India would follow other leading nations.
According to a recent report from CCN, the Indian government has decided to avoid immediate crypto regulation. Though India acknowledges that crypto assets remain unregulated, it continues to impose hefty taxes without gathering significant industry data over the past five years.
Is India Falling Behind within the Crypto Race?
The government’s lukewarm attitude towards crypto has caused several corporations to maneuver their operations overseas. On top of that, the shortage of clear regulations leaves investors exposed to potential hacks and theft.
In 2023, WazirX, India’s largest crypto exchange, suffered a $230 million cyberattack, prompting a move to Singapore for restructuring. CoinDCX was one other victim, experiencing a $44 million hack just last week.
Interestingly, Siddharth Sogani, CEO of blockchain analytics firm Crebaco, voiced his growing concern over India’s crypto regulation landscape, describing the situation as increasingly bleak. In his own words:
Countries just like the U.S. are regulating left, right, and center—and Indians are left with frustration. It’s been over 10 years since I’ve been fighting for regulations. I submitted several documents and even visited the Parliament, but no luck. Finally, I gave up and moved my business overseas.
In conclusion, the longer term of crypto in India stays uncertain. With the federal government’s rigid tax regime and lack of clear regulations, businesses are increasingly looking elsewhere. As the worldwide crypto market continues to evolve, India’s reluctance to adapt could stifle its potential on this fast-growing sector.
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Nynu V Jamal
Nynu V Jamal is a Senior Journalist at CoinGape with over 3 years of experience in writing about crypto and blockchain. She has written for CoinEdition and CryptoTale, mastering the art of navigating the dynamic crypto landscape. Beyond journalism, Nynu is a literary enthusiast and published poet, with a Master’s degree in English Literature. Follow her on LinkedIn for more updates.
Since 2017, CoinGape has been providing insightful coverage of the cryptocurrency industry. Our team of seasoned journalists and analysts ensure accuracy and balanced reporting by following our Editorial Policy. We confirm sources, fact-check stories, and attribute quotes and media appropriately, covering all points of the digital asset space.
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