India To Opt Wait And Watch Policy Over Crypto Law
As the new financial year 22-23 kicks in, the new 30% cryptocurrency tax comes into effect in India. However, the growing crypto industry of the nation still awaits proper digital assets regulations. The Indian government seems to be delaying the introduction of the cryptocurrency bill in parliament. According to Bloomberg, the government isn’t planning to introduce any law on it soon.
No clarity over crypto bill
The 30% tax on cryptocurrency gains is the highest tax bracket in the country. The same duty has been levied on the lottery winnings. However, many lawmakers have already compared the gains from crypto trading with activities like horse racing and lotteries. Moreover, the country will also be charging 1% Tax Deducted at Source (TDS) on very crypto related transactions.
As of now, the Indian authorities are opting for a “wait and watch’’ policy over the matter. As per Bloomberg, the nation will form a framework to regulate digital assets only after a global consensus emerges. An inside source has reported that the ministry is also delaying in structuring a law to regulate or tighten provisions.
There has been an uproar in the Indian parliament over the discussion on the taxation of digital assets. Some Members have even advocated for increasing tax from 30% to 50% on the crypto gains. While other parliamentarians have targeted the government’s inability to understand virtual digital assets and the evolution of Web3.0.
Indian crypto market grows amid uncertainty
In January 2022, Prime Minister Narendra Modi addressing the World Economic Forum mentioned that actions taken by any single country will be insufficient to deal with the challenges of emerging crypto related technologies. The Reserve Bank of India (RBI) has been a top critic of cryptocurrencies in the country. Meanwhile, the Central bank-backed digital currency CBDC will be coming out soon by the end of this year.
Investment in virtual digital assets has increased in the country since the Supreme Court quashed the curbs implied by the RBI in 2020. The Indian market has grown by over 640% from July 2020 through June 2021, reports Bloomberg.
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