The momentum that the crypto landscape in India was witnessing has lost some of its steam. This is as the government has introduced two new laws, which heavily tax unrealized gains from cryptocurrency. The first of these crypto laws requires all citizens to provide 30% of their unrealized gains as tax. This law has already come into effect from the 1st of April.
This law caused a commotion within the Indian community dedicated to cryptocurrency. This was followed by both entrepreneurs as well as investors trying to figure out what the impact of this announcement actually was.
The Two Crypto Laws In India
The second of the two crypto laws stated that there would be a 1% tax deducted at source, when it came to every crypto transaction. This could have an even larger impact on the trading activities of the Indian crypto community. Thetr are already many entrepreneurs in the crypto niche who are thinking about moving their bases to a country with friendlier regulations.
After the additional taxes were imposed, it was reported by crypto exchanges based India, that trading volumes had witnessed a massive drop. Data taken from CoinGecko also shows that the crypto exchanges within the country are down by at least 56.8%. This is as more and more investors are looking at exchanges offshore in order to cut what losses they have, as a result of these two new crypto laws.
Nirmala Sitharaman, the finance minister of India, has already acknowledged this backlash. She stated that the government may reconsider and make amendments to the crypto tax laws, after careful consideration.
