TL; DR Breakdown
- India’s parliament member Modi called for a 50% tax increase on crypto profits.
- The government recently imposed a 30% tax on crypto returns, which is already affecting the market.
Sushil Kumar Modi, a member of India’s upper house of parliament and a member of the governing Bharatiya Janata Party (BJP), called for an increase in cryptocurrency transaction tax by 50% in a recent interview.
The move is intended to discourage residents from investing in crypto assets, given that cryptocurrencies are new and risky. The former deputy minister of Bihar also noted that the country does not currently have a framework for regulating cryptocurrencies and that more work needs to be done in this area.
“Nobody understands what this crypto is,” Mr. Modi said. “That’s why we need to discourage and disincentivize trading and investing in the asset class,” he added.
India’s contradictory relationship with cryptocurrencies
This isn’t the first time the government has suggested raising taxes on crypto trades. For over five years, India has condemned cryptocurrencies as an unreliable investment system, fighting them both in court and at the international level. However, despite these regulators’ negative sentiments, trading hasn’t been hindered, making it one of the top countries to trade with decentralized currencies.
In February of this year, the government announced plans to increase taxes by 30%.
The crypto community in India is currently waiting to see what happens. Some people are worried that the government will crackdown on cryptocurrencies, while others believe that the proposed tax increases signify that the government is starting to take digital currencies seriously.
The actions of the government show they are intent on regulating the crypto market. However, some of the proposed guidelines could have a major impact on the future of cryptocurrency in India.
India MPs propose to raise crypto tax higher than 30%
From the beginning of April 1, the government of India had sought a 30% tax on all revenue generated by the sale of virtual digital assets and cryptocurrency assets, as well as a 1% tax at source on every crypto transaction beginning July 1. Investors will also be unable to use losses from other transactions to offset gains made in this market.
According to Modi, all of this is a priority for the Indian government because it is currently drafting legislation that will determine India’s crypto future for the next years and how to deal with cryptocurrencies either as an asset, stock, good, or service.
On Monday, Cryptopolitan reported that the Indian crypto exchanges and market, in general, were significantly affected by the 30% tax rule, which became effective on April 1. Some exchanges recorded about a 15% to 50% drop in volume.