30% tax on crypto trading might spell doom
Finance minister, Nirmala Sitharaman has dropped a bomb on crypto currency users in India by announcing 30 percent tax on crypto digital transactions.
The crypto users are being treated on par with those earning money from horse racing, gambling and other luxury activities.
This puts in place two options for the current millennial generation of crypto users. They can quickly transfer the digital funds to other lesser taxable speculative instruments like the share market or futures and derivatives.
Alternatively, they can shuttle back to possession of physical bank assets, in which case they will be faced with taxation on the known source of income.
The current bunch of crypto users who dwelt on ease of transactions and also felt comfortable without any tax liabilities are forced to sit up and take notice of the government move that got announced in the budget speech tabled in parliament today.
Crypto users in India, nearing slightly more than a million are unlikely to continue trading on the digital platform as the 30 percent tax slab it attracts will bleed their finances heavily.
While the budget announcements had a positive impact on the stock markets, people felt the move to impose 30 percent tax on crypto trading will adversely kill digital transactions that have so far had a field day in the country.
Many investors were of the opinion that the government should act wisely to ensure growth in the digital platform. “A rational tax slab will ensure a high volume of transactions and in turn increase the GDP growth rate,” said a market analyst.
As of now, the reactions are yet to pour in from the players in the crypto market. When things get clearer on options that are available for exit routes, steady trends are bound to emerge.
The finance minister meanwhile has stated that she didn’t burden people with any extra taxes, in wake of the pandemic situation.
