Not legal tender though.. In the latest Budget session in the Indian Parliament, it was announced that cryptocurrencies will be considered as Digital Assets and taxed 30% on gains. So out of the blue! A 1% TDS will also be deducted on every buy & sell order.
For an average user this sucks because 30% is huge but I feel it's better than the complete blanket ban like Chinese government did. We can fight it later and get it reduced hopefully but for now, this announcement automatically made crypto LEGAL in India. Remember how the news of complete "crypto" ban was doing rounds a few weeks ago? At least we are not going to miss on this economy.
What's Next For India?
This move at least brought some clarity on the GOI's (Government of Indian) stance on crypto. Reserve Bank of India (RBI) would also issue a digital currency (CBDC) in the upcoming financial year and it will be backed by physical assets or a stash of INR (Indian National Rupee). The next thing on the table is the Crypto Bill which regulates the whole space apart from taxation. Hopefully it will be proposed and discussed in the next parliament session.
Is 30% Tax Too Much?
Yes, I would call this move a little regressive but it's a start to a new digital revolution we all were waiting for. Skeptical investors and banks will now have to support the space by providing services to invest in these assets. It was also proposed that any loss from transfer of digital assets related to crypto space cannot be set-off against any other income which will increase the tax burden on the taxpayer. This is completely ridiculous and I am sure local crypto community would fight against it.
Impact On Overall Crypto Market
India has over 749 million internet users and it is estimated that over 20 million people currently own cryptocurrency or invested in digital assets. That's only 2.67% of the total internet population. We have a long way to go and legalization of crypto will definitely help to expand the crypto community within the country. Although there might not be an immediate impact to bloody crypto markets but it's a great news in long term.
What do you guys, especially Indians on Hive, think of this news? Please comment below!