A poll found that almost 83 percent of business owners believe their frequency of transactions has decreased as a result of the government’s decision to impose a 1 percent withholding tax (TDS) on transactions involving digital assets.
There is another another cryptocurrency tax in India.
Indian regulation of cryptocurrencies was already known to be very strict, with a fixed tax between 28% and 30% in particular. With a 1 percent tax due at source for any bitcoin transfer exceeding $167 starting on July 1 though, it is a new levy that will undermine cryptocurrency traders and exchanges in India.
According to a joint survey by Indian cryptocurrency exchanges WazirX and Zebpay, almost 23% of those surveyed are also thinking about moving their trade to foreign exchanges because of high taxes. In terms of investors becoming victims of international exchanges that aren’t KYC compliant, this emigration offers a serious concern.
ZebPay’s CEO, Avinash Shekhar, said:
- “While India’s cryptocurrency tax policy is a step in the right direction, certain parts should be given another look in order to create a more hospitable regulatory climate for all sector participants and eventually advance the nation’s economy.”
From January 1 through April 15, 2022, 9,500 traders who had been active throughout the year participated in the Trader Sentiment Survey. Of course, this is just a small portion of the Indian market, which has a keen interest in emerging technologies and cryptocurrency trading, which is one of the reasons why Ripple is expanding rapidly in India.
“The results show that a significant percentage of respondents want to limit the frequency of their exchanges and their engagement in the category,” Avinash Shekhar continued. The world is experiencing revolutionary change thanks to cryptocurrencies, and it is in the best interests of our nation to promote rather than discourage involvement. Adoption and innovation are hampered by restrictive regulations.
The most impacted are the younger generations.
According to the report, millennials have been substantially more negatively impacted than their elder counterparts.
45 percent of long-term investors kept onto their bitcoin portfolios in the hopes of future tax policies that would be more favorable, while 28% of respondents aged 18 to 35 liquidated more than 50% of their holdings before April 1. This demonstrates their faith in the long-term improvement of the tax provisions brought about by an amicable dialogue between the many stakeholders.
In fact, bitcoin trading has grown in importance for younger generations, notably Generation Z, much like NFTs did. She uses social media to give investing advice, which makes this generation especially susceptible and deserving of special government assistance. This might be especially risky for traders or investors who are less experienced.
Without outright banning them, Indian regulators continue their campaign against cryptocurrencies by imposing high levies that encourage users and investors to reconsider how they utilize cryptocurrencies in India.
 on transactions involving digital assets...){kind=link}