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Indian Central Board of Direct Taxation (CBDT) revealed that it had collected over 100 crore INR ($12 million) from one percent Tax Deducted at Source (TDS) on crypto transactions.
India’s Central Board of Direct Taxes (CBDT) has collected more than 100 crore INR ($12 million) from one percent TDS (Tax Deducted at Source) on crypto transactions in this financial year. pic.twitter.com/B1XZ8zzWms
— Xia DeFi (@defi_xia) October 11, 2023
A report published by Crypto News says that the country managed to collect more than 700 crore INR ($84 million) from online gaming companies and crypto payments in total.
India sees a surge in crypto adoption despite additional taxes
Last year, in July, India implemented a new 1% direct tax on all crypto transactions. The move led to what was described as a “phenomenal increase” in crypto transactions for the country.
Nirmala Sitharaman, the nation’s minister of finance, announced the new tax regime during her 2022/23 Budget speech, claiming that the crypto adoption is unsupervised and that it needs to be regulated.
The taxes did not discourage the masses, however, as the country saw a massive wave of crypto adoption, becoming the top-ranking nation in the Chainalysis Global Crypto Adoption Index for 2023.
After India, the second spot is held by Nigeria, followed by Vietnam, the US, Ukraine, the Philippines, Indonesia, Pakistan, Brazil, Thailand, China, Turkey, Russia, the UK, Argentina, and others.
However, according to the Chief Public Policy Officer at Indian crypto exchange CoinDCX, Kiran Mysore Vivekananda, the introduction of TDS was meant to discourage crypto adoption. Given how the situation has developed, the TDS has failed in its purpose, as Crypto News reports.
The allure of the crypto sector has been too strong, and while that means that Indian crypto users have to pay more in taxes, they do not seem to be bothered by this if it means that they get to use cryptocurrencies.
Indian crypto exchanges are struggling due to TDS
Vivekananda has complained about the TDS’ impact on Indian exchanges, however, stating that many are finding it difficult to work with it implemented.
Meanwhile, foreign exchange platforms provide Indian customers with the ability to invest in crypto without deduction of TDS.
#MCPolicyNext: Indian exchanges are finding it very difficult. Foreign exchanges provide these Indian consumers to invest in crypto without deduction of TDS, Kiran Mysore Vivekananda said
Watch here 👇https://t.co/jWoWPN0VCF#IndiasG20Presidency #G20Presidency #G20 #G20India… pic.twitter.com/1Fp0h22uYV
— Moneycontrol (@moneycontrolcom) August 25, 2023
It is also worth mentioning that the TDS does not include the income tax on profits made from crypto trading, which the government collects separately.
Still, Indian citizens refuse to abandon cryptocurrencies, and indeed, it appears that the adoption rate will continue to increase.
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