Indian tax authorities collected Rs 158 crore (about $19 million) in TDS on transfers of virtual digital assets (VDA) till March 20, Minister of State for Finance Pankaj Chowdhary told Parliament on Tuesday.
Considering that the financial year ending March 31 can be taken as the final figure for the entire financial year 2022-23.
1% TDS on $125 limit
The Indian government brought crypto transactions under a new tax regime through the 2022-23 budget. It provides for 1% TDS on VDA transfers exceeding Rs 10,000 (about $125) in a financial year. In addition, all gains on VDA transfers were subject to 30% income tax.
1% TDS to be deducted from July 1, 2023. In November, the minister informed the Indian Parliament that TDS collections on VDAs from 1 July to 1 November stood at ₹60.46 crore ($7.4 million). Given the low tax collection, it was expected that the government would reduce the tax rate and bring it between 0.05% and 0.1%, in line with industry demand. But the authorities did not give any such relief.
regulator vacuum
Subsequently, crypto transactions were placed under the Prevention of Money Laundering Act (PMLA). Industry representatives unsurprisingly hailed the decision as it provides a sort of clarity, a break from a complete regulatory vacuum.
Due to high taxes, along with a hostile regulatory environment, India, which had a growing crypto ecosystem, started giving advantages to neighboring and more friendly jurisdictions such as the UAE and Singapore.
According to a Nasscom study, 60% of India’s 450 Web 3 startups are registered outside the country. The report also pointed out that India is well placed to drive the Web 3 transformation thanks to its large talent pool, which accounts for 11% of the global market.
crypto adoption growing
According to the latest data from Statista, there are 150 million crypto users in India. By the end of 2023, India’s crypto adoption rate could exceed that of the UK and US, and 11% of locals will have experimented with digital asset transactions.
India hosted the G20 Finance Ministers and Central Bank Governors meeting last month, where discussions on crypto regulations figured prominently. And it looks like by the end of 2023, the powerful economic bloc will have some sort of regulation for the cryptocurrency sector.
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source: cryptopotato.com
