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The past few years observed a hot & rising investment topic amongst many – cryptocurrency. The 2022 Indian Fiscal Budget acknowledges cryptocurrencies. Finance Minister Nirmala Sitharaman announced a tax of 30 percent on an income from cryptocurrencies and is categorized under Virtual Digital Assets (VDA) for taxation purposes.
Implementation of the New Rule
April 1, 2022, onwards India’s new cryptocurrency tax rule will be implemented and many crypto enthusiasts have begun discussing the drawbacks as well. Leading crypto exchanges believe that small investors will be heavily impacted by tax rates.
As per the data collected from various crypto exchange firms, India has a total of $3 billion as crypto assets, however, many investors only have a portfolio size of Rs 50,000 and Rs 1 Lakh and this bracket is the most impacted.
The Reaction of the Crypto Community
Additionally, the brunt of the new crypto rule can be the main cause of a significant dip in trading volume activity and investments. The CEO and Co-founder of CoinDCX, Sumit Gupta compared the crypto rule to gambling.
“The lack of an opportunity to offset expenses and carry forward losses will act as a deterrent for small businesses and will hamper wider adoption.”
Nischal Shetty, the Founder, and CEO of WazirX also feel differently about the rule. He stated that the lack of a better understanding of cryptocurrency deters law enforcement and entrepreneurs from functioning seamlessly. He claims that this will be the reason for the suffrage of the Indian crypto ecosystem.
