Here’s how crypto exchanges are reading FM’s 30% taxation announcement

The Finance Minister announced taxation on gains arising from the sale of virtual assets at a flat rate of 30 per cent in her Budget speech, without any deductions to be allowed on these gains. The government also laid out the detailed provision over tax deducted at source (TDS) at a rate of 1 per cent levied on payments made on transfer of digital assets.

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 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,” he added.

The majority of the industry players are delighted by the words of the Finance Minister, who gave a formal acknowledgement to the crypto industry. Though a few of them are worried about the higher taxation.

“The budget is forward-looking and inspirational. It has touched key points that’ll help us create modern, powerful, digital, and sustained growth. We welcome the budget and congratulate the Finance Minister for a futuristic budget,” said Sumit Gupta, co-founder and CEO, CoinDCX.

Taxation of Virtual Digital Assets or Crypto is a step in the right direction as it gives much-needed clarity and confidence to the industry, he said.

Welcoming the government’s move on taxation, the industry players said this move by th government legitimises industry to a large extent.

The majority of people, especially corporates, who have been sitting on the sidelines because of uncertainties will now be able to participate in crypto, they said, adding that it is positive for the industry overall.

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

Industry players see this move as definitely a remarkable feat for the ecosystem and a much-needed booster shot for the sector.

It is interesting to note that the Finance Minister has said that 30 per cent tax would be applicable on the capital gains of all digital assets, said Edul Patel, Co-founder and CEO, Mudrex.

The digital asset classification encompasses crypto, NFT, and most government-issued currencies. Bringing all these under one roof suggests that the government has taken a progressive stance on the adoption of cryptocurrency in India, he added.

The ecosystem along with its businesses and investors are primed for growth in the upcoming future. The Government has already laid the foundation for future thriving and sustaining industry, said industry players.

Vikram Subburaj, CEO, Giottus Crypto Exchange said that the Government is recognizing crypto-asset ecosystem and has taken efforts to give clarity on its taxation. This legitimizes the crypto asset in the country, he said.

“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. Offsetting and carrying forward losses have worked well in other countries but we are happy to see a consideration given to all such instances,” he added.

The move from the Finance Minister will change a lot of misconceptions around crypto-assets and pave the way forward to classifying them as a separate asset class, many believe.

Taxing income from digital assets may discourage some investors as prima facie it appears severe, said Pratik Gauri, Co-founder & CEO, 5ire. “However, taxation signals at the Indian government and the ecosystem are accepting digital assets,” he added.