For a long time, we have been surrounded by virtual currencies and the speed at which their use cases are increasing in everyday life is something that was never anticipated and one of the main contributors to this great success is cryptocurrency. industry.
The world of cryptocurrencies has been more than successful in attracting potential investors from all over the world and has also managed to make a name for itself in the global market. Not only that, but the said industry has had a spike in its overall growth and popularity recently, thus helping it reach greater heights!
Having said that, I think most of you are already familiar with the basics of the industry, but if for some reason that’s still not the case, let me help you with that first.
To begin with, cryptocurrencies, as the name suggests, are nothing more than a form of online or digital currency that can be easily used for a variety of purposes, including buying and selling goods and services, as well as trading and the exchange. about cryptocurrency exchanges available on the web.
In technical terminology, cryptocurrency is a blockchain-based platform that is known to be decentralized at its core. Being decentralized, the crypto world becomes more than capable of getting out of the general control and jurisdiction of central authorities and can also function freely without unnecessary government interference.
On top of this, when the industry was first introduced, there weren’t many coins to choose from and honestly, not many people were looking to be a part of it either, as people back then were very skeptical of the return on investments they made. could. expect, as well as the safety of your money too.
On the contrary, looking around today, it feels almost unreal to see how far the industry has come, with pools of coins available today for investors to choose from, with new ones coming in every passing day, and tons of new investors joining. in every hour.
Speaking of many coins available on the market today, some of the most popular ones worth investing in include Ethereum, Polkadot, Binance Coin, Bitcoin, PancakeSwap, Dogecoin, Cardano, EverGrow Coin, as well as Baby Doge, to name a few. just some of course.
Also, it is worth noting that some of the major factors contributing to this extraordinary industry success include its negligible response time, convenience, ease of use, portability, intuitive nature, high margins of benefit, real-time updates. as well as volatility, of course.
Being volatile, it is important for you to be aware of the fact that it is not always possible to predict price changes and act accordingly, as price fluctuations in the crypto market are almost immediate, thus leaving no time to to plan. Therefore, whenever you trade currencies online, keep in mind that if the industry gives you the opportunity to make big profits and make quick money, if not done right, you could also end up with significantly large losses.
Not only that, but based on the chatter between some of the leading experts in the field, we have come to realize that cryptocurrencies are making rapid progress in completely revolutionizing the global payment system, and from my point of view, it looks like it has already started. . To do so, many merchants and businesses have started accepting cryptocurrencies as an official form of payment from their customers.
Now that you have a brief background history on the crypto world, you will be able to understand much better what we have with us today, the new crypto laws in India. To find out more, I suggest you read on!
New cryptocurrency laws in India
Regarding the growing euphoria of cryptocurrencies in the country, there have been several accelerated developments on the way forward for virtual currencies with the RBI governor. Shaktikanta Das began with a warning about cryptocurrencies. In other words, it has recently come to light that cryptocurrencies may become a very serious financial and economic concern, Das said a couple of days ago.
As of April this year, cryptocurrency-based earnings are said to be taxed at 30 percent, which is the highest tax bracket in the country and the same rate as lottery winnings. Not only that, this law would be applicable to all ‘virtual digital assets’, from non-fungible tokens (NFTs) to Bitcoin and other related earnings as well as.
On the other hand, if we talk about stock trading, the tax rate there can vary from zero, that is, if it is presented as a business income based on tax slabs, up to around 15 percent in case it is presented as a gain from short-term capital. . In addition to this, keep in mind that a tax rate on par with the lottery is just the tip of the iceberg and cryptocurrency investors in India will also need to be much more aware of other provisions in order to stay on the right side of the law in India. the financial year 2022-23!
moving further, India is known to have around ten million cryptocurrency users, seeing nearly $100 billion in trading volume in 2021. Plus, according to calculations from the founder of WazirX, an Indian cryptocurrency exchange, that could bring about an additional $100 million in income taxes (rounding down to $750 million rupees) in a year.
It is worth noting that India has been a country that has had a hot and cold relationship with virtual currencies in recent years. Not only that, in 2018 it managed to effectively ban crypto transactions after a series of frauds, on the heels of Modi’s sudden decision to wipe out around 80 percent of the nation’s currencies, but the Supreme Court struck down all restrictions on March 2020.
On a similar note, after the Supreme Court managed to overturn the RBI order, which effectively lifted the ban on virtual currency trading, the general madness in the county increased at a dizzying pace.
In addition, the new regulations that we are talking about, they were intended to be introduced by the Indian government during the winter session of parliament, which started on November 29 last year. However, the session ended and the cryptocurrency bill didn’t really hit the table at that point.
Know that, this was the second time that ‘The Cryptocurrency and Regulation of the Official Digital Currency Bill, 2021′ was put on the agenda but deferred. The last time was during the Parliament’s budget session, in February 2021.
Coming back to the topic, as mentioned, the tax rate has been set at 30 percent, which is also one of the highest cryptocurrency taxes seen so far. This specific regulation may be extended to all digital assets, starting from Bitcoin, related earnings, non-fungible tokens (NFT).
That said, there will also be an implementation regarding the 1 percent tax deducted at source (TDS) from July 1, 2022. Apart from this, the Indian government is working on classifying cryptocurrencies as goods and services under the GST lawso that the global tax can be easily collected on the total value of the transactions.
According to sources, at present around 18 percent of the GST applies to services provided by cryptocurrency-based exchanges, which are further classified as financial services. Also, GST officials are of the opinion that virtual currencies are somewhat similar to casinos, lotteries, betting and other activities that have 28 percent GST on the total value.
To sum it up, As discussed, investors will be charged a 30 percent tax if they do anything with their crypto-based investments other than simply converting them back to rupees in their bank accounts. Exchanges are also responsible for submitting TDS taxes to the Indian government on a monthly basis, while the 30 percent tax is largely the responsibility of individuals and their CPAs.
Furthermore, the government has not yet decided how it will implement the 1 percent tax when the buyer or recipient of a certain cryptocurrency-based transaction is located in another country. This has really left crypto exchanges confused. Aside from this, all earnings from virtual assets are taxable from April 1, 2023, and the 1 percent TDS will take effect from July 1.
However, according to the announcement of the Central Board of Direct Taxes (CBDT) dated February 3, all cryptocurrency transactions made between 2021 and April 2022 will also be subject to this new tax regulation from the Indian government.
Even though these recent cryptocurrency regulations have managed to clear several doubts that Indian investors may or may not have accumulated in their minds regarding these virtual currencies, surely they are not that enthusiastic about them. Several crypto groups have even urged the Modi government to reconsider its planned 1 percent TDS and asked Sitharaman to reconsider his proposal.
Reading so far, I hope you have had a clear idea of the new crypto laws in India that started in April and I believe that you will now be able to better plan your future with cryptocurrencies by keeping in mind all the new laws and regulations put in place by the Indian government. .
As mentioned at the beginning, cryptocurrencies are a highly volatile and extremely uncertain market. Therefore, you must understand the fact that all cryptocurrencies also have their own risks and you should only invest if you are willing to take those risks and bear the losses if necessary.
In conclusionWhat are your thoughts on the new crypto laws in India? Let us know in the comments area below. To learn more about various cryptocurrencies, check out other articles we have on our website. Thank you for your time and if you found our content informative, please share it with your investor friends!