India is one of the countries where cryptocurrency is in a neutral state. It means neither it is legal nor it is illegal however we have got taxation since last year. Tax implementation does not mean that the government has legalised it however as per the government it is just a process to generate tax revenue for the government and as far as the legalisation is concerned it is still in process. The government has not shared any update about the regulation on crypto whether they are going to come out with some framework for Indian Crypto investors or the exchanges. Even the current environment in the Crypto market in India is not user-friendly because exchanges are struggling with banking services and as a result, users are not able to withdraw money easily.
Some of the exchanges can manage with certain banks to provide instant deposits or the withdrawal for the fiat currency but the majority of exchanges are not able to implement it. The first financial year with the tax implementation has been completed on 31st July and the time for filing is ongoing. 31st July is the last date for the tax filing and since this is the first time so people are struggling to file their taxes as there is no clarity available for them to understand. Taxation is a legal liability that one has to follow and whatever is the payable amount must be paid on time by filing the accurate taxes.
Institutional Framework
While the country has not yet shared or created any framework for the institutions but it is certainly a requirement that some corporate giants can also be part of the market which will result in more money inflow. Usually, the arrangement is not the same for the individual and institutional investors and since the institutional investors invest a bigger amount so they are provided some additional benefits but for that it is required to have the framework in place. Some of the exchanges have expressed concern in the past that the government should look into this area and create something that can encourage more investors to be part of the ecosystem but seems the government is not in the zone to create something or even talk about it.
With the push for a ‘Digital India’ and the introduction of Central Bank Digital Currencies (CBDCs), there is a recognition of the importance of digital currencies in the development of global digital payment systems and India’s acquisition of virtual digital assets like cryptocurrency
Indian government runs a program called Digital India through which they try to transform the industries from manual practice to the digital world which is a good initiative. I am part of Digital India they have also launched the central bank digital currency known as cbdc. This way the government is trying to reduce the manual efforts on the logistics management for the fiat currency which is a good initiative. If the government is trying to bring more digital solutions to enhance their digital ecosystem in the country then they should also look into Crypto which can be a good source for the country in terms of revenue and employment generation provided they bring a positive framework.
Clarity on Taxation
When institutions are involved then it is obvious that the government would create clear guidelines for taxation but as of now only individuals are taxed at a flat rate of 30%. These tax percentage is very high and must be revisited by the government but last year this has not been done yet and even looking at the current scenario it does not seem that soon the government is going to do this. there are many flaws in the tax process as of now which is affecting the users, especially the traders that are performing multiple transactions in a day. it is good that the government is trying to tax every profitable transaction and through TDS they are tracking the transactions but the percentage has to be reasonable. TDS is not a tax instead it is a process to track the transactions happening in Indian exchanges.
The Indian crypto community is expecting that the government must be working on it however it is sure that they are not in a hurry but if they come out with some institutional framework then it can be a good signal for the crypto growth in the country. More money inflow means there would be better innovative solutions for the traders and even exchanges will be trying to bring better products as they will see more demand in the market.
Thank you so much
Stay Safe
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I'll be downvoting some of your posts...I can see you upvote (self-vote) your own posts despite being already well-rewarded and I think your vote cold be better served by supporting some of the other users around the blockchain.
I'm not asking you to stop self-voting, you have the freedom to do so of course, but I'll be adjusting some of your post-rewards and thought I'd do you the courtesy of telling you why.
Well noted on the feedback. Thanks for sharing the reason and I appreciate it. DV with reason makes sense and you did the same. Respect you.
Have a great day.Hi @galenkp
Thanks for your reply.
I just think someone like yourself, (well-rewarded), could help support accounts that could really benefit from your upvote, even if it's just to help them feel welcomed and inspired to continue. You don't need your small upvote...but it might just help a smaller account stay around and that's of benefit to the entire community.
Have a good weekend.
I agree with what you said. Thanks for sharing the idea. I will try.
Have a great weekend dear.
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Very nice post. I learned few things today.