In 2023, India will continue to apply its rigorous crypto tax regulations. In fact, when announcing the country’s budget, Finance Minister Nirmala Sitharaman made no mention of cryptocurrency, virtual digital assets, central bank digital currencies, or the digital rupee, which suggests the most recent tax laws.
The biggest democracy in the world imposed onerous taxes on cryptocurrency transactions last year: a 30% profit tax and a 1% tax deducted at source (TDS) on all transactions. The year turned out to be what the industry had predicted would be a “period of suffering.”
In the nine months following the announcement, Indians transferred more than $3.8 billion in trading volume from domestic to overseas crypto exchanges, and interest in cryptocurrencies fell precipitously. Crypto trading volumes fell almost immediately.
According to a story published earlier this week by CoinDesk, a number of those closely involved in the regulation of cryptocurrencies have previously expressed publicly their desire for a tax cut while privately believing it was impossible. The industry’s top demand and the consensus among policy think tanks were to lower the TDS to 0.01%, or at the very least, 0.1%.
According to Rajagopal Menon, Vice President of Indian cryptocurrency exchange WazirX, “Indian crypto companies are on the staircase to paradise” because there have been no changes to the current crypto taxation. “We hope the government would reevaluate its stance on cryptocurrency taxes.”
Since the beginning of last year, India has put a cryptocurrency bill in cold storage because it believes that global coordination is essential to the success of crypto regulation.