Over the past few years, the stance of the Indian Government on crypto has been unclear. However they have imposed heavy taxes on crypto to discourage Indian investors despite this, India ranked one in global crypto adoption. Recently, a statement from India’s Central Board of Direct Taxes (CBDT) has gathered everyone’s attention.
Tax Collection from Crypto Transactions
In an interview on Tuesday, October 10, 2023, Nitin Gupta the chairman of CBDT, said that during the financial year 2023-2024, the CBDT has collected over 100 crore INR, equivalent to $12 million from the TDS (Tax Deducted at Source) despite the challenging situation in the country. This one percent TDS was imposed last year on all cryptocurrency transactions.
Also Read: 115 million Indians have invested in Crypto despite regulatory uncertainty
The chairman also revealed that during this current financial year, they have collected a significant over 700 INR ($84 million) through TDS from the rapidly growing online gaming companies and crypto transactions. In a separate report, it was also observed that over $12 million was accumulated from the tax on crypto transactions.
However, this tax collection is relatively low, as the chairman only discloses the amount received from TDS and does not include the 30% income tax that the government received on the transfer of crypto transactions. This 30% income tax on crypto and the one percent TDS were announced by the Indian finance minister Nirmala Sitharaman, during her budget speech of 2022-2023.
From Crypto Ban to Global-Regulation Advocacy
The stance of the Indian central government has completely reversed in the last year, as the government has gone from calling for a complete ban on crypto to taking a stance for global crypto regulation for this evolving industry during the G20 summit, as reported by Todayq News.
Because of this one percent TDS and 30% income tax on crypto transactions, it poses major challenges for the cryptocurrency exchanges. As a result of this, many exchanges are either departing from their services in India or laying off employees as seen in the past few months.
This significant TDS collection is only possible because India is ranked one according to the Chainalysis Global Crypto Index. The Global Crypto Index made a comparison of over 150 countries based on several factors, in which the Asian country ranked at the top in this evaluation.