Indian Tax Authority Collects $12 Million from Crypto Transactions
The Central Board of Direct Taxation (CBDT) in India has announced that it collected over 100 crore INR ($12 million) through the one percent Tax Deducted at Source (TDS) on cryptocurrency transactions. This news comes as part of a report that states the country has collected more than 700 crore INR ($84 million) from online gaming companies and crypto payments overall.
Crypto Adoption Surges in India Despite Additional Taxes
In July of last year, India implemented a new 1% direct tax on all cryptocurrency transactions. Despite this tax, there has been a significant increase in crypto adoption within the country. In fact, India currently ranks first in the Chainalysis Global Crypto Adoption Index for 2023, with Nigeria coming in second.
The Chief Public Policy Officer at Indian crypto exchange CoinDCX, Kiran Mysore Vivekananda, has stated that the introduction of TDS was intended to discourage crypto adoption. However, it seems that Indian crypto users are undeterred by the additional taxes and are willing to pay them in order to use cryptocurrencies.
Challenges Faced by Indian Crypto Exchanges
Vivekananda has expressed concern about the impact of TDS on Indian exchanges, noting that many are struggling to work with this tax implemented. On the other hand, foreign exchanges allow Indian customers to invest in crypto without deduction of TDS.
It’s important to note that TDS does not include income tax on profits made from crypto trading, which the government collects separately. Despite these challenges and additional taxes, Indian citizens continue to embrace cryptocurrencies, and the adoption rate is expected to keep rising.
Hot Take: The Resilience of Indian Crypto Users
The implementation of the one percent TDS on crypto transactions in India was aimed at discouraging adoption, but it has not deterred Indian crypto enthusiasts. Despite the additional taxes and challenges faced by local exchanges, Indian citizens are still embracing cryptocurrencies. This demonstrates the resilience and determination of Indian crypto users to participate in the digital asset space. As the country continues to rank high in global crypto adoption, it is clear that the allure of cryptocurrencies outweighs the tax burden for many Indians.
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