By Shelly Melancon (Switzerland)
In a new development, Indian financial authorities have revealed that foreign crypto exchanges with a customer base in the country may have to pay taxes up to 18%. This comes on the heels of the turn of events in which the Asian country said rather than an outright ban on cryptocurrencies, it would pass a bill in July in a bid to regulate the space. According to initial reports, the bill will be submitted to the Indian Parliament’s Monsoon session this month.
Indian Parliament Moves to Pass Crypto Bill in July
India is gradually turning its back on its previous position in 2018 where it prohibited the buying and selling of crypto assets. In fact, the ban outlawed cryptocurrencies and made it difficult for Indian residents to purchase crypto without doing so secretly. The ban was so until the Supreme Court of India, in March, overturned the government’s 2018 regulation. Now, Indians can trade crypto freely, however, the government is yet to adopt a concrete pro-crypto stance. Perhaps with a crypto bill in the works, it may indicate a significant move towards embracing cryptocurrencies.
Tokenhell earlier reported that India’s Ministry of Finance had set up a research team on cryptocurrencies; thus the team’s findings may form a substantial part of Parliament’s discourse this month. Experts have called out to the Indian government to classify cryptocurrencies as digital assets and not currencies. The proposed tax regulation may signify the readiness of Indian financial authorities to actively regulate the space.
Crypto Investments in India Over the Roof in 2021
Despite the government’s neutral stance on cryptocurrencies, studies reveal that crypto investments have witnessed more turnaround than ever in 2021. The studies further showed that investments on crypto assets have peaked by 19,900% since this year began. It puts the total value of crypto investments made in the country at $40 billion. The data rounded up the number of crypto investors in India at 15 million, with indian youths making up a large percentage of investors.
The proposed tax law would cover exchanges outside the country that provide Online Information Database Access and Retrieval (OIDAR) services. Further reports on the regulation revealed that the exchanges would have to appoint a group or person in the country who would be liable for the accruing taxes.
However it may seem, the law would certainly discourage exchanges who are looking to set shop in the country- Kraken and BitFinex had stated plans to begin operations. Meanwhile, WazirX, leading crypto exchange in the country has come under heavy scrutiny following allegations of money laundering against it. India’s DOE accused the exchange of colluding with chinese gamblers to launder money made off illegal gambling apps in crypto. In a separate, the exchange was forced to absolve itself of culpability following the arrest of a certain Crypto King in the country for narcotics purchase via crypto.
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