According to the latest reports, the Indian authorities recorded about $19 million from tax collected on crypto transactions in the 2023 Fiscal Year. In addition, the Indian government reportedly aims to encourage web3 participation and development in the country via various innovations.
Indian Government Gained $19.2 Million As Crypto Tax In 2023
Earlier in 2022, the Indian government enforced a new rule that warrants Indian investors to remit a 1% Tax deducted source (TDS) on every profit gained on crypto transactions. In addition, investors were mandated to remit another 30% tax from profits made from crypto transactions. The heavy crypto rule took effect on April 1st, 2022, under section 194S of the Income Tax Act of 1961 in the country. In addition, the 1% TDS levy was enforced in July of the same year.
The advent of the tax law spelled a tough time for crypto traders in the country. In addition, many investors refrained from trading, and some limited their trading capital while others traded with offshore crypto platforms. Nevertheless, traders’ adverse reactions did not deter the regulator from holding back its harsh crypto rules.
Furthermore, Indian authorities recently announced that it had made over 19 million US dollars from the 30% flat tax rate imposed on crypto traders in the 2023 fiscal year. The Union Finance Ministry revealed on March 20 this year that the vast sum, which was about Rs 157.9 crore ($19M), was raked in mainly from tax collected at source on payments made upon the transaction of crypto assets.
According to reports, the Union gave up the numbers when asked about the specifics of the revenue, which it has realized from the tax law.
India To Embrace Web3 Technology
Meanwhile, the latest reports have shown that the Indian government is quite interested in improving the participation rate of Web3 in the country. According to the report, the Minister for Information and Technology in India, Rajeev Chandrasekhar, recently stated that the government would love to encourage technological innovations. He added that the country is cautious about protecting its people while promoting technologies that would ease business and living in its territory.
Furthermore, he said the country’s administrations were quite comfortable with the concept of digital currency that the crypto industry propagated. The Minister further explained that their harsh and heavy regulation approaches on the crypto industry were never due to their legality/illegality or harmful/harmless perception of the innovation. Instead, Chandrasekhar said they were mere principles employed to vet whatever innovations they wished to adopt in the country.
In addition, the IT Minister emphasized that the Indian regulators have a unique opinion on issues concerning the internet, Web3, and blockchain included. He stated that they welcome innovative technologies like Web3 with open arms and do not have any problems adopting them. However, he said that the RBI considers crypto as a microeconomic risk.
India To Consider Crypto Legal If Regulated
Just like financial regulators in many other countries, the Indian Central bank has always emphasized the potential of cryptocurrency to pose risks to the country’s financial stability. Hence, it has always proposed a total ban on digital assets from the onset.
However, as Chandrasekhar has earlier claimed, the Indian government has no issue with the crypto industry, so far its activities are regulated. He highlighted that purchasing crypto assets from a reliable and registered platform is not illegal. However, he pointed out that the government is being careful with the fastest-growing tech in order to protect its citizens from the volatile crypto market.
The IT minister deduced that crypto innovation is fashionable, trending, and desirable. However, he stated that it is too early to conclude whether cryptocurrency is good or right. In conclusion, Chandrasekhar noted that time is the only test that would reveal the true identity of the crypto technology.
