What's going on with Indian government and Crypto?

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2 years ago
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Intro

If you don't know the Indian government has been threatening to ban Crypto for quite sometime but still haven't come out with a regulation act just yet.

However, they have (even without making a law) decided to tax all Crypto trade in the latest national budget.

Here are a few key takeaways from from the budget:

  1. Income from transfer of virtual digital assets such as crypto, NFTs will be taxed at 30%.

  2. No deduction, except the cost of acquisition, will be allowed while reporting income from transfer of digital assets.

  3. Loss from digital assets cannot be set-off against any other income.

  4. Gifting of digital assets will attract tax in the hands of receiver.

Source: https://cleartax.in/s/bitcoins-taxes-india

What does this mean?

It means that any profit you make will be taxed at 30% on all trades, meaning if you made 10 trades and 2 of them made a profit of $2 and rest 8 trades made a loss of $8 essentially an overall loss of $6 from your trades, still you will pay tax on the $2 profit.

In other asset classes, like shares and bonds if you made an overall loss despite a few good trades then you didn't have to pay tax as you can report it has a overall loss.

Taking money from the pockets

This is essentially taking money from people's pocket. Imagine somebody losing all of there saving in a red market and government comes demanding tax for a few old trades.

Meanwhile, governments would bailout failing banks and bloated loss making public sector corporations.

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