Cryptocurrency taxes are emerging in India, and investors are not quite happy about it

For quite a long time, India has been lagging in legalising or regulating digital assets in India. But Indian policymakers are quite well-aware of the profits that cryptocurrency and blockchain have brought about for individual investors and global industries as well. But finally, Indian Finance Minister Nirmala Sitharaman announced the Government's final verdict to introduce cryptocurrencies in the Indian economy in its Union Budget session for 2022. The verdict talked about the introduction of taxes on virtual currencies. Well, it seems like the Government is going to implement these regulations quite soon. Reports have revealed that from April 2022, cryptocurrency gains will be taxed at 30%, which is also one of the highest cryptocurrency taxes, and at the same rate as charged for a lottery prize. This regulation will extend to all virtual assets, starting from Bitcoin, NFTs, and related earnings. There will also be an implementation of a 1% tax deducted at source (TDS) starting from July 1, 2022. 

The Indian Government has been working on the classification of cryptocurrency as goods or services under the GST law, so that tax can be levied on the entire value of transactions. Currently, according to sources, 18% of GST is levied on services provided by crypto exchanges, which are categorised as financial services. GST officers possess the opinion that cryptocurrencies are quite similar to lotteries, casinos, betting, and such other activities which have a 28% GST on the entire value. Besides, GST at 3% is levied on the entire transaction value in the case of gold. 

Even though crypto regulations have cleared several doubts that Indian investors have been building up in their minds regarding the stature of these digital currencies, they are not quite happy about it. Several cryptocurrency groups have urged the Modi government to rethink its planned 1% TDS and asked Sitharaman to reconsider her proposal.