Indian Government Collects Over $12 Million From Crypto Taxes
India’s Central Board of Direct Taxes (CBDT) has collected more than 100 crore INR ($12 million) from one percent TDS (Tax Deducted at Source) on crypto transactions in this financial year.
The Indian government had implemented one percent direct tax on all crypto transactions from July 1, 2022.
In an interview with ANI, the tax body’s chairman revealed that they have collected over 700 crore INR ($84 million) in TDS during the current financial year from online gaming companies and crypto transactions.
Over $12 million was collected from taxes on crypto.
However, this TDS collection does not include income tax received by the government on transfer of crypto that is placed at 30 per cent.
Tax Imposed After “Phenomenal Increase” in Crypto Transactions
Though crypto regulations in India remain unclear as of now, the central government has imposed heavy taxes in order to curb unsupervised crypto’s adoption in the world’s most populated country.
In her 2022-23 Budget speech, India’s Finance Minister Nirmala Sitharaman announced one percent TDS on crypto transactions.
She cited “phenomenal increase” in crypto transactions as a reason for a specific tax regime.
At the same time, she proposed taxing income from the transfer of any virtual digital asset at 30 per cent.
The central government of India has significantly changed its stance on crypto regulations in the last year.
The government has gone from calling for a complete ban on crypto to promoting a global framework for regulating the nascent industry.
Tax Policies Force Indian Users to Use International Exchanges
Gaurav Mehta, the co-founder of Catax, a crypto taxation assistance platform, told CryptoNews that a multitude of traders have sought refuge on international exchanges where TDS is not enforced.
According to industry estimates, approximately 36,000 crore INR, which is roughly $4.3 billion, has moved to international exchanges since the implementation of tax policies in India, Gaurav added. He further noted:
It’s crucial to address the applicability of TDS on international exchanges promptly. Establishing a clear process and implementing a proper disclosure mechanism will likely enhance compliance and overall collection figures.
Despite the heavy tax policies India has ranked number 1 in Chainalysis Global Crypto Index. The Global Crypto Adoption Index evaluated more than 150 countries based on several metrics to evaluate grassroots adoption of cryptocurrency in which the Asian country was ranked at top.