What cryptocurrency exchanges have to say about new 30 percent crypto tax

Cryptocurrencies have long been out of the government’s direct purview. The maximum control the govt had on this asset class was through cryptocurrency exchanges. During the Union Budget 2022 speech, Finance Minister Nirmala Sitharaman mentioned a new ‘Virtual Digital Asset’ class. Cryptocurrencies and NFTs should be falling under this label.

The govt has proposed a tax of 30 percent on this new category of assets. Taxation might lead to lower overall returns. However, it also gives this investment option some amount of legitimacy from the Indian Govt.

Cryptocurrency exchanges are still on the frontline when it comes to this relatively new asset. The govt has the power to regulate these exchanges. BGR.in spoke with some of the most prominent exchanges in the country to find out what they think about the govt’s new move. Should crypto investors rejoice that there is some formal acceptance? Or is 30 percent tax a little too much for the industry?

WazirX

Nischal Shetty, Founder & CEO, WazirX said, “India is finally on the path to legitimising the crypto sector in India. It’s phenomenal news that India launching a blockchain powered Digital Rupee. This move will pave the way for crypto adoption and put India in the front seat of innovation.”

Shetty further added that, “It’s also interesting to note how our government is beginning to recognise crypto as an emerging asset class. The biggest development today, however, was a clarity on crypto taxation. This will add the much needed recognition to the crypto ecosystem of India. We also hope this development removes any ambiguity for banks, and they can provide financial services to the crypto industry.”

He claimed that this move by the govt will give a lot of people the incentive to invest in this digital asset. Shetty claimed that majority of people, especially corporates, who have been sitting on the sidelines because of uncertainties will now be able to participate in crypto.

ZebPay

Avinash Shekhar, CEO, ZebPay said, “Tax has always been applicable to gains on virtual digital currencies, but the ecosystem did not have clarity on it. The move to tax virtual digital assets gives the entire ecosystem including investors and exchanges transparency on the road ahead. 30% tax on income from virtual digital assets, while high, is a positive step as it legitimizes crypto and hints at an optimistic sentiment towards further acceptance of crypto and NFTs across stakeholders in the country. The government has come a long way in its stance towards crypto from last Feb to today and we are confident that this will herald a new era of growth and innovation for India in a Web 3.0 world.”

He further said that, “Additionally, the announcement on the launch of a Digital Rupee using blockchain issued by the RBI will familiarise Indians with the benefits and efficiency of virtual currency, building an appetite for the crypto, blockchain and the multitudes of innovations and employment opportunities that these technologies are capable of fostering.”

CoinSwitch

Ashish Singhal, Founder and CEO, CoinSwitch and Co-chair Blockchain and Crypto Assets Council (BACC) said, “We welcome the government’s decision to introduce central bank digital currency (CBDC) to accelerate digitization. We also believe that various budget measures to improve digital payments adoption will induct more digital-savvy Indians into the financial ecosystem willing to explore newer forms of investing and wealth creation.

Singhal further said, “The budget provides clarity on taxation and shows the government’s intent to take a business-friendly approach while protecting the interest of consumers and the exchequer. We hope to work with the government to help bring crypto-asset taxation at par with other asset classes and participate in the central government’s vision to promote economic growth.”

Giottus

Vikram Subburaj, CEO, Giottus Crypto Exchange, said, “We are delighted by the announcements today. It gives relief to a lot of investors that the Government is recognizing the crypto asset ecosystem and has taken efforts to give clarity on its taxation. This legitimizes the crypto asset in the country and paves way for a formal umbrella of regulations going forward.”

He further added, “A standardized 30% tax treatment is welcome though we await the details on what is a taxable event and what is the threshold for 1% TDS deduction. We do hope that the Government will give exchanges and other businesses a certain time period to enable the tech behind TDS deduction and bookkeeping.”

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