During a time when crypto prices appear to be tanking like never before, India is dealing with heavy crypto-related tax woes.
India Is Hiking Its Crypto Tax Enforcement
Right now, regulators in India are imposing new taxes on all kinds of crypto activity. There is a one percent tax on all crypto trades that occur within the country’s borders. In addition, there is going to be a 30 percent digital income tax put in place. Thus, it looks like anyone who engages in crypto activity in India is going to be paying a lot of money for their actions. One can honestly say it doesn’t matter if India bans crypto or not; the nation is hurting it through its regulatory staples.
Rajagopal Menon – vice president of Wazir X, a popular digital currency exchange in the nation – explained in a recent interview:
We are scraping the bottom of the barrel as far as volumes are concerned. The number of regulatory tangles, lack of ease of doing business, and paperwork that has been created on every single trade has made investors and traders wary, and we are seeing that people are moving to international exchanges or to the grey market.
The nation’s crypto sector is already being hit hard due to falling prices. The entire crypto arena was initially valued at more than $3 trillion during the early portion of 2022. However, the valuation of the space has dipped below $1 trillion, suggesting massive losses unlike anything we’ve ever seen. The world’s number one digital currency by market cap (bitcoin) is also barely able to maintain the $20,000 mark at press time despite trading for approximately $68,000 per unit just nine months ago.
Now, with these new taxes in place, many crypto exchanges and related companies in India are beginning to take precautions as a means of ensuring they can remain afloat while the digital currency space continues to suffer.
Kumar Gaurav – founder of the digital bank Cashaa – mentioned in a statement that several India-based digital currency companies are beginning to lay off employees like mad. He commented:
Several companies are laying off people after hiring a huge number last year and now have to look at operational and other corporate cost-cutting measures.
What Is Going on in the Country?
Despite the general attitude of gloom and doom permeating the space, not everyone is worried about the future, with Coin Switch CEO Ashish Singhal stating:
A bear market is a cleansing process, and weak businesses will perish while companies with the right business model will emerge stronger.
India has been very up and down regarding crypto. Following the Supreme Court’s reversal of a 2018 ban that disallowed crypto companies from working with traditional finance firms, the nation’s Parliament has gone back and forth regarding a potential full ban that would end all trading in the country.