Crypto market grows 200 times in 1 year Indian exchange tax payment plan on the agenda

While India’s regulatory stance on cryptocurrencies remains unclear, the country’s crypto market has surged to nearly $40 billion from about $200 million a year ago.

While the attitude of Indian regulators toward cryptocurrencies remains unclear, the country’s crypto market has jumped from about $200 million a year ago to nearly $40 billion. With the rapid growth of the Indian crypto market, foreign cryptocurrency trading platforms from India may be subject to an 18 percent goods and services tax (GST) if they operate in the country, according to a report by informed sources in the Economic Times.

Tax payment plan on the agenda
The sources also noted that overseas companies that provide online information database access and retrieval (OIDAR) services and do not have a physical presence in India could designate a person responsible for paying the tax.

In fact, as early as June 22nd, media sources indicated that current Indian law may require a 2% tax on cryptocurrencies purchased from offshore exchanges that provide services to the Indian market. In response, Girish Vanvari, founder of the tax consulting firm TransactionSquare, said that the tax is based on market prices, which companies may need to add to the cost of crypto assets.

Earlier, the Indian government also introduced cryptocurrency rules that require companies trading in cryptocurrencies to disclose information such as their cryptocurrency holdings in their financial statements from April 1, which applies to all Indian companies. India’s Finance Minister Anurag Singh Thakur also said that since income from any source is included in the Income Tax Act, 1961, and any provision of services (if not specifically exempted) is taxable under the Goods and Services Tax (GST), income from cryptocurrency trading and services provided by crypto exchanges are taxable.

A Resurgent Market and Aggressive Exchanges
Indeed, the cryptocurrency space in India has seen a “renaissance” since the country’s Supreme Court struck down the central bank’s cryptocurrency ban last year. Leading investor Tim Draper, founder of Draper Associates, has turned his attention to the Indian crypto market. In addition, many trading institutions such as Binance and CoinDCX quickly responded to the change and began offering digital currency trading services. CoinDCX is reportedly backed by several large investment groups including Polychain Capital, HDR Group, and Bain Capital Ventures, while Binance acquired Indian exchange WazirX and is ready to invest $50 million to support blockchain projects in the region.

In addition, the lifting of the ban has led to a significant increase in the desire to buy digital cryptocurrencies in India. In contrast to this, local exchanges are also competing for users.

Publicly available information shows that 15 million Indians are currently involved in crypto trading, close to the 23 million people in the US, compared to 2.3 million in the UK. RichiSood, co-founder of India’s first cryptocurrency exchange, says the country’s growth is mainly coming from 18-35 year olds, and CoinGecko data shows that daily trading volume on the country’s four largest cryptocurrency exchanges has soared to $102 million from $10.6 million a year ago.

In the face of India’s rapidly growing crypto market, June 18 – International funds are attempting to benefit from India’s blockchain ecosystem, yet despite the growing interest in cryptocurrencies and blockchain, the lack of a clear regulatory framework and the possibility of an outright ban has left most Indian funds in limbo.

Indian exchanges, however, are struggling to find secure, viable, and permanent payment solutions amidst uncertain regulations. This is largely due to the fact that banks in India are not keen on allowing crypto transactions. According to AvinashShekhar, co-CEO of ZebPay, banks are reluctant to do business, which has led to delays in settlement for the exchange, so it is even taking the risk of seeking other payment processing options.

For now, it appears that the Indian government’s bitcoin-hostile stance is shifting as the crypto market continues to grow. According to TheNewIndianExpress, the Indian government has abandoned its earlier plans to ban bitcoin altogether and is proposing to classify cryptocurrencies as an alternative asset class. In addition, the Securities and Exchange Commission of India will also be working with the Indian Ministry of Finance to oversee the development of cryptocurrency regulations in the country. Insider sources also claim that a comprehensive crypto regulation bill will be discussed in India’s parliament in July this year.

According to analysts, the abandonment of a total ban on Bitcoin and the consideration of a comprehensive crypto bill is a positive sign for the market, as the latter is clearly more capable of promoting a stable industry in the long run than a ban and uncertainty, with a related regulatory scheme and a possible taxation plan in place.

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