A recent <a href="https://www.esyacentre.org/documents/2023/11/9/impact-assessment-of-tax-deducted-at-source-on-the-indian-virtual-digital-asset-market" rel="noopener noreferrer nofollow">survey</a> conducted by India’s leading technology policy think tank, Esya Centre, reveals that Indian investors want the government to rethink its high taxation on crypto.
The survey, carried out in March and April, spanned five major cities and included responses from 1,342 highly educated individuals. The findings underscore a major awareness among <a href="https://thecoinrise.com/india-calls-for-global-crypto-framework-at-g20-summit/" rel="noopener noreferrer nofollow">Indian investors regarding the regulatory landscape</a>, with 58% knowledgeable about crypto taxation and 52% familiar with anti-money laundering (AML) laws.
<h2 id="span-style-font-weight-400-india-s-aml-laws-span">India’s AML Laws</h2>
One of the critical insights from the study is the shift in investment patterns due to India’s AML laws. Since last year, the country has mandated crypto businesses to register with the <a href="https://thecoinrise.com/binance-fined-2m-by-indias-fiu-amid-regulatory-crackdown/" rel="noopener noreferrer nofollow">Financial Intelligence Unit (FIU)</a> to adhere to the Prevention of Money Laundering Act (PMLA). This regulation has led to an 8% increase in equity investments over crypto investments, indicating a major impact on investor behavior.&nbsp;
Despite numerous studies advocating for a reduction in crypto taxes, India has maintained its stringent tax regime since its introduction in 2022. The survey by Esya Centre shows that awareness of tax regulations boosts investment in crypto assets by 10% and increases the use of foreign crypto platforms by 15%.
However, the blocking of nine offshore exchanges by India has somewhat reversed this trend, with some investors finding ways to bypass the URL restrictions, suggesting that AML laws alone cannot mitigate the effects of high taxes.
<h2 id="span-style-font-weight-400-current-crypto-tax-system-span">Current Crypto Tax System</h2>
<a href="https://thecoinrise.com/no-change-in-indias-crypto-taxation-despite-industry-push-for-reforms/" rel="noopener noreferrer nofollow">India’s current tax system on cryptocurrency</a> is notably harsh. Profits from buying and selling cryptocurrency are taxed at a flat rate of 30%, plus a 4% cess. Effective from July 1, 2022, a 1% TDS is imposed on crypto transactions exceeding ₹50,000 (or ₹10,000 in certain cases) annually.
This TDS is deducted at the source and remitted to the government. Unlike other asset classes, there is no tax advantage for long-term cryptocurrency holdings, with the 30% tax applying regardless of the holding period. The 1% TDS has made a significant portion of crypto gains subject to taxation, prompting many investors to shift their transactions offshore.
The think tank’s report recommends that the government consider revising crypto tax rules to prevent capital flight to offshore platforms.
Finance Minister Nirmala Sitharaman has faced substantial criticism for the heavy taxation on both cryptocurrency and middle-class income. Memes and satirical posts are trending online, reflecting widespread discontent.
The post <a href="https://thecoinrise.com/indian-investors-wants-revision-in-crypto-taxes-survey/" rel="noopener noreferrer nofollow">Indian Investors Wants Revision in Crypto Taxes: Survey</a> appeared first on <a href="https://thecoinrise.com" rel="noopener noreferrer nofollow">TheCoinrise.com</a>.

Indian Investors Wants Revision in Crypto Taxes: Survey

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