CoinDCX CEO Urges Indian Government to Slash Crypto Tax from 1% to 0.01%
According to Bloomberg, CoinDCX CEO Sumit Gupta has taken the lead in lobbying the Indian government to reconsider its cryptocurrency taxation policies. Gupta’s plea is centered around reducing the Tax Deducted at Source (TDS) on crypto transactions from the current 1% to a mere 0.01%. This move, if accepted, could alleviate the burden on crypto traders and potentially rejuvenate the Indian crypto market. However, experts suggest that such a shift in India’s crypto tax regime might take up to two years to materialize.
India has been grappling with crypto regulations for some time now, and the imposition of a 1% TDS on cryptocurrency transactions last year sent shockwaves throughout the industry. The TDS levy was met with resistance from traders, market makers, and high-frequency investors, who withdrew from the market due to the increased costs associated with trading. The result was a significant decline in trading volumes at Indian cryptocurrency exchanges.
Sumit Gupta’s plea to reduce the TDS from 1% to 0.01% comes at a critical juncture for the Indian cryptocurrency market. His argument revolves around the idea that a lower tax rate will not only encourage more participation in the crypto space but also stimulate innovation and investment. Gupta emphasizes that a more favorable tax environment is essential to ensure that India remains competitive in the global crypto landscape.
While the appeal for a reduced TDS rate has garnered attention, experts caution that changing India’s crypto tax regime might be a time-consuming process. The regulatory landscape surrounding cryptocurrencies in India has been marked by uncertainty and skepticism. Government agencies and lawmakers are treading cautiously, mindful of the potential risks associated with digital currencies.
Furthermore, the government’s stance on cryptocurrencies may not shift overnight, and it may take considerable time and effort to arrive at a consensus that favors a reduced TDS rate. The two-year timeframe mentioned by Gupta highlights the realistic expectation that substantial changes in tax policies and regulations will require thorough deliberation.
The imposition of a 1% TDS last year was a substantial setback for the Indian crypto market, leading to a sharp decline in trading activity. A reduction in this tax rate could provide the much-needed boost that the market requires to regain its momentum. It could also attract new investors and traders to the cryptocurrency space, potentially leading to increased liquidity and market growth.
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