Topic: India's confusing crypto bill (Read 407 times)

It's very confusing indeed, the finance minister am sure doesn't know or bother to know anything about crypto, they have no clue and just shooting arrows in the dark I guess? The tax thing is confusing, never really bothered to check and research about what and how the tax will be applied to, but this duality approach that "it's something we discourage" and "we will take cash from your profits" is really a very big hypocrisy, I guess they have taken this matter because there was a pending need to talk about crypto in parliament for a long time I think they will just leave it again without saying any further till next time

They already know what number of taxes would discourage crypto use, every country does.

ie - A tax on stock trading at 30 percent, hypothetically, would objectively be lower than a crypto tax that the government decides to be at 50 percent. You are paying more in taxes on crypto gains than you are on stock gains in relative percentages, so the incentive is for investors to dump their funds off of crypto instead of trying to game the market and make more off crypto to offset the taxes. I've long said the way government can feasibly ban Bitcoin is by taxing it to pieces and forcing people to not want to invest or use it as a day-to-day currency. Most businsses already pay too much in taxes, they have no reason to further take on a tax burden that might be associated with Bitcoin use.

If coming up with a decision when majority of the first world countries are yet to take a decision on how they are going to handle the cryptocurrency situation is not that easy like you think. Right now what they have done is they are including cryptocurrency trading in a tax bracket and even if the tax percentage is high it sends a signal that they are not going to ban anytime soon.

The whole state of India is confused, the country is divided because the stakeholders are having different clique, half want it to be legalized and the other part wants it to be banned, they both are pushing to pass/deny the bill for bitcoin freedom that's why we are seeing different headlines about bitcoin ban and taxes from India.


Have you read the 2022 report of crypto crime analysis? you can find everything from Chainanalysis^[1], You will come to the conclusion that India is just a minor in Bitcoin crimes. The money the government has been printing has its bad side too, they should allow people to do whatever they want it freedom(bitcoin).

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[1] https://go.chainalysis.com/rs/503-FAP-074/images/Crypto-Crime-Report-2022.pdf

To date, there is no working example of the implementation of blockchain technology, but many industries are testing possibilities for better accountability, services, and transparency.

Crypto and blockchain technologies are a bit more complex to understand. Bitcoin is the first successful application ever used in the world using blockchain technology, but we should not have to ignore Ethereum and its forks.

As the post is about the crypto bills in India, it's very hard for the government to keep watch on every transaction, so the government trying to make a blanket rule by charging a 30% tax on crypto trading against fiat. but it is completely unfair considering bitcoins current status under regulation and legal conditions.

Personally, I think that at the moment this is just talk about the future of cryptocurrencies in India, in principle, as elsewhere. You can see the information about recognition, then about the collection of taxes, but where is the guarantee that this is official information from the Indian authorities? And there are no guarantees, there are only news of which there are now a lot and very often each news contradicts the other. Based on this, I can assume that at this stage we are just talking. As for real cases, there should be clearly adopted laws on this matter, as you correctly noted, first on recognition, and only then on taxes, and so on.

Please tell me you don't actually believe Binance or Coinbse runs their exchange on a blockchain or that their trade engine is something blockchain-related?
I asked you for one real-life already functional blockchain application that uses blockchain technology that can actually be claimed has propelled the world of technology to new heights! There have been numerous tries but still, there is no serious breakthrough, every major company is just saying it's exploring, it's looking into it test implemented and then in most cases there is nothing.

There is only one world application of blockchain technology that has actually proven to be overall useful and adopted, and that is Bitcoin! The original and nothing else. The rest of the projects that have been completed to date have proven nothing, absolutely nothing on a large scale. While Defi was indeed promising on paper and there are user case situations where it would theoretically make sense there is nothing about it to claim it could drive the entire world in a new direction.

My views are on the government's role. As laws are made or changed in parliament only. So considering the government's stance on crypto, they have no proposal for legalization. But at the same time government knows how big volume assets are involved in crypto.

Many countries including India, have no control over Bitcoins production, no control over Bitcoins distribution, even no control over Bitcoins Price fluctuation, still countries like India trying to bring it under taxation. What to say?

Already there are other ways to reduce taxes on crypto. But according to laws for fiat, persons have to pay taxes accordingly.

Exchanging Fiat against Cryptocurrencies on exchangers is booming nowadays. Every exchanger is a working example of a blockchain-based application, but they are still centralized. So, in addition to it, Dex and Defi are the new trends in the crypto industry.

So what?
We had a whaling association that didn't stop states from banning whaling at all. Let's forget whales or lead paint or how farmed salmon or kinder eggs are banned in some countries, there is an incoming ban on diesel cars, and if those manufacturers are not part of most associations out there I don't know who does.
If they want to ban something that much they can issue a law have it voted and if it passes goodby all of them wazrix, bitbns, and so on, that association will drop them from its ranks and that's it.

If a moronic government decided it's time to make another stupid move that's it,  vote somebody else next time.
We had a Chinese Blockchain Association , did it help?


Care to show me one revolutionary example of a blockchain application that has taken the world to a new height?
Legit working already put in place accessible to the population, not pipedream no Ico no empty promises project?
There are tons of projects, maybe 1% of them would qualify for the above but I can hardly find one that could claim it had such impact.


Not giving it legal status doesn't mean it is illegal, for example, Bitcoin is not legal tender nor a currency by English law, yet it is not deemed illegal, right now India is in the same situation as most of the world and hopefully, it will get better, not worse.

Banning is not possible in a legal manner? How do you say that? What is legal or illegal is decided by the parliament itself and if it wants to declare something illegal it definitely can. Nothing can really stop that unless you are violating the constitution itself which too anyways can be ammended. I think you didn't get my point. My point was if government is going to levy TDS on every crypto transaction they are indirectly making trading futile exercise hence banning bitcoin in an indirect way.

Bit different view,

As in India Wazirx, BitBNS, CoinDCX, Zebpay, and a few more offer crypto exchange services, where users can only exchange cryptocurrencies, except that no government can know how much crypto asset you hold.

All of the above exchanges are members of IAMAI (Internet And Mobile Association of India), along with this Binance is also a member of IAMAI. So, banning is not possible, in a legal manner. so taxation of the exchanged asset against fiat is charged by 30%.

At a certain level, exchanges have always been with the government for legal interaction. But to date, everything is going well as it's all about KYC and AML.

But crypto and blockchain are revolutionary and innovative concepts taking the world to a new height. The government also still testing its possibilities. But surely it will take much time to adjust to the global economy. As in the crypto market, many innovative things are happening which are solely based on cryptocurrencies, blockchain including AI and ML technologies.

So the future is completely innovative but at the same time, it will be much more costly.

They didn't allow their financial system engage yet in cryptocurrency although the Reserve Bank of India tends to push forward for crypto ban but unsuccessful, the main idea is that india never declare bitcoin a ledger tender and their citizens were not ban from engaging in the use of cryptocurrency, the mastery they only exhibit is over the 30% tax imposition. I also believe after several years of thorough observations on bitcoin and still found outstanding with a maintained standard, possibly their iota of doubt could have been clarified in accepting bitcoin as a legal tender.

man I confess that I'm shocked by this news, I didn't know it was possible to pay tax for something illegal, how could that be possible?


they are becoming a joke with these attitudes, why don't they decide right away what they want? if they don't like bitcoin just put laws that guarantee people won't use bitcoin to commit crimes and let people choose whether or not they want to use bitcoin, they look like dictation governments disguised as democratic

yes onece they changed their decision about bitcoin to ban but to taxi it. even tax percentage is too high but still people were hopping at least it will become legal there, but the latest news again make some confusion. but everyone know and sure  about it that not only India but every other country will make bitcoin legal in future.

If you are really that a kind of investor who do always look after fundamentals then these kind of decisions do really look confusing and at the same time it would really be that
annoying on which decisions do revert back and forth which you would really be having that kind of reaction which could also goes back and forth.
They are the ones who do make out their decisions it might be still un sure but i wont be surprised that it would be changing later on again.

Wait, didn't they say that they won't ban bitcoin anymore and will instead tax it? And now they are once again talking about banning? What is this country actually up to? It's funny to see how they still can't decide what they want to do with crypto currencies. As if taxing their citizen 30% wasn't enough for them.
I guess by "legal" they meant that taxing doesn't mean that they are now considered as a legal tender. This means you are free to trade, use or accept bitcoin but it is not mandatory for someone to accept it as a mode of payment. I mean when you pay with bitcoin, the merchants can deny this form of payment (since it isn't a legal tender) and ask for fiat money.

Yes they can charge taxes even though they are yet to declare the legal status of an asset.

But AFAIK, they mentioned that they didn't recognise cryptocurrencies as legal tender which doesn't mean it's not legal there but they are about to launch their own CBDC and probably after that they can declare the legality status of Bitcoin and other decentralized cryptocurrencies.

Exactly, I don't understand why poeple are so confused about this.
It simply means that cryptos will not be a legal payment method, which would force everybody from the administration and from the private sector to take payment in bitcoin. It simply doesn't recognize this as a legal payment method but that doesn't mean you're not allowed to use it if you want that.
Goats are not legal payments in Europe but it's not against the law to sell somebody 10 goats for a bicycle.


You pay taxes from your profits from rice farming in India, right? Does rice have legal status? 
Is rice legal tender, no! Is rice outlawed? No again!
Where is the confusion?

Oh, and btw from an article quoted:


There goes the myth of India's 100 million users and trillions in crypto invested.

Seems that in India everything is possible. So basically you won't be stopped from doing illegal things, you will only be taxed for them. But I wonder if that actually turns the tide in favor of crypto when the government sees that they could be getting some additional funds from the taxation. It might not seem much, but then again, India has a lot of people, so that could add up to quite a sum. But then again, governments around the world are constantly shifting their opinions on crypto, so who knows how this will turn out.

I wonder what the government is planning to do with Crypto.

Recently they introduced taxes on incomes made with Crypto, but now a Reserve bank of India deputy governor calls for an outright crypto ban.

https://www.livemint.com/market/cryptocurrency/banning-crypto-the-most-advisable-choice-open-to-india-rbi-deputy-governor-11644851315064.html

India's stance on cryptos has always been confusing to me. They have been swinging between banning, legalizing and taxing cryptocurrencies for years now. Trying to follow their plans has been frustrating, to say the least.

I think this is how the government is probing this market. It is far from certain that everything will remain as it is now. It is possible that the conditions will be partially relaxed in favor of cryptocurrency miners and a more “gentle” tax regime may be introduced. Obviously, we have already observed this more than once - when conditions for holders and earners become unbearable or at least unacceptable - they simply migrate along with all their "economy" to more favorable places. This is what is today.

If I can recall correctly, India even had a proposal long time ago about banning the usage of it and I am not sure what happened truly after that since I don't live in that country. Sure they can tax it now, though I am curious how would they do that to those people that are doing p2p transactions though.

Accepting crypto is not fully or the regulations used are only limited to commodity trading and should not be used as legal tender. However, the tax rate is indeed unreasonable, too high. 30% is a crazy tax. Just imagine the profits that crypto gets are not much, but the taxes that are required will make anyone against it. The Indian government wants to make big profits from taxes on crypto users. it looks very greedy.

That's the nature of most bills or laws, they're confusing that you have to read the fine print so as to find a way to get away with it or to eben understand it. I wouldn't worry about this bill though, pretty sure that the people and the lawmakers will eventually forget about it and pretty sure that India will change it's stance when it comes to this kind of thing.

The news that I used to get on where India actually stands in crypto currency has always been confusing to me. Sometimes you will see news that it is legal in India, and within the next few days you will see another news saying that it is no longer legal.

Okay I remember a time when it was said that Bitcoin was finally declared a legal asset in India, and then within a few days I was also seeing the news again that it has been cancelled and is no longer legal. And then all of a sudden after seeing that they now charge tax for cryptocurrency investment which is up to 30%, now I’m seeing another news that they are saying it is not legal, what is really wrong with this government? Where do they stand actually?

There is no way that they can be collecting tax when something is not legal in their country. So, they are just really confused. Unless maybe the media are the ones who are not getting it, maybe fake news?

I agree with you Teosanru , I think India government is trying to ban crypto trading by imposing tax on it.

India has a full of drama , for my years here in crypto ? there are tons of crypto related issues that had been tackled and many are from India, legalization and Banning and now here we are confusing bill?
no wonder what would be coming in the next?
what kind of news are we looking for this?

They will never at least not this year or in the next 5 years because all they have for crypto is problem and issues .

They aren't serious about it, knowing the past issues and corruption in the Indian Government, their officials have been taxing cryptocurrency for a while and the fact that they haven't even legalized it is disrespectful, we can't expect much from them. And I do feel bad as well for the people in India who've been looking forward for Bitcoin and crypto to be legalized with low tax fees, instead, the government took advantage and it really is sad.

That’s quite bad, the first time when I saw news about the tax that they have set out for Bitcoin, I was pointing out that the tax was too much and it’s going to discourage some people from investing or involving themselves in anything that has to do with Bitcoin and other cryptocurrencies. If they are going to end up banning Bitcoin in their country, then what’s the need of setting up a tax for it?

It is of no use at all as they wouldn’t be able to tax something that is not legal in their country. So, how do they plan on taxing Bitcoin if they have stopped their citizens from making use of it?  it’s not going to work.

I don't see they are serious in adopting bitcoin. If that was the case, they would have lowered the taxes to encourage people to use crypto. Instead, they hinted that they won't let anyone earn crypto as they will be taxed very high.
This statement was a big disappointment to the people of India who wanted to integrate bitcoin and also earn bitcoin by different means like mining etc.

Plan on banning what ? they already said that crypto is not legalized on their country, that is indeed confusing or maybe what they mean by not legalizing is like not adopting btc like what El Salvador did where they adopt btc as a legal tender or as a form of currency.

What India did there is same to what most countries are doing where they also accept crypto but not totally. taxing on cryptos do also happens on other countries but I think their tax rates are not high as on India. 30 percent on tax is not a joke, what did their government eat when they are planning this ? or are they simply greedy and wants more from the crypto users .

Yes i believe that they are trying to supress crypto users into giving up crypto but at the same time taxing them as well, I think either they are rushing up things or having some other plans as the Indian based centralized exchanges will be the worst one to be affected and users will stop using them and move on to decentralised exchanges and also some traders who already hold huge amount will just shift their base or start using proxy from a crypto friendly nations for cashing out and other activities.

IMO there could be two possibilities after researching a lot about India.

1. Particular businesmen associated with government would like to dominate the crypto market and they are too late wherein other exchanges like Wazirx, Coinswitch and Coindcx are well established and this draconian rule is to make them go bankrupt and then the businessmen associated with government of India who will find them in elections will be starting their own crypto exchanges with relaxed rules from government.

2. Indian government don't understand crypto and making a huge mistake and run by fools.

What are we expecting in Indian Government ? they are acting like this for how many years?

having issue of banning and regulating and then allowing ? this is not new from this country so better to get use to it until they finally act a truthful and real law or bills in which people will understand and accept.

even in majority of countries.. where alcohol is allowed.. the truth is this

alcohol consumption is illegal and prohibited... then regulated where
only licenced businesses can sell alcohol publicly
only permitted to be consumed by adults
only licenced brewers can brew it for public consumption
only permitted to be brewed for personal consumption by adults

so alcohol is NOT 'free use' or 'open use' or 'legal for all use cases'

same is/will be true for crypto.
prohibited and then regulated for only certain use cases

That just shows how some Governments can become a nuisance to themself. How do you even tax something that you consider illegal in your country If it is illegal that means it shouldn't be traded or used and yet you collect from the same illegal source. I think they want to weigh the option, of taking 30% tax against banning which will be better for the Government so I believe we have to wait until the Bill is actually passed.

Let me clear that for you! The Finance Minister said that taxing crypto doesn't mean that it will become legal. She meant, taxing crypto will not make it a legal tender, i.e, cryptos can't be used against products and services. Otherwise, how can several crypto exchanges are working in the country? Most of them are above 1 billion USD valuation.

The government was clear enough from the very beginning, that crypto will never become a legal tender. We are worried because the government could have banned crypto altogether. But instead they have just taxed it. So it's a positive step forward. Now this tax is just a proposal in the budget. Now the proposal will go to parliament, drafted as a law, passed by the speaker and signed by the president. A long way to go!

Taxes pay their government salaries and they are getting pressure from financial institutions that are saying that they have to pay taxes on other financial tools, but people with Crypto currencies are not taxed.

So what do you do if you see an excuse to tax something.... well, you say it is still illegal ...because you are still working on the legislation.. but you go ahead and tax it, so that your salaries can still get a boost.    (pure hypocrisy shown by a corrupt government)  

It feels like they will gonna update this regulation after they finalized and announce it to the public. looks like it's a big blow for the local exchanges and the common folks who are only started to use bitcoin or accept it as payment to their stores and services. Since the government saw the potential huge money they can get from it, they won't hesitate to pass this regulation. Looks like India is also still crypto's enemy this year.

As i understand this, india will impose 30% taxes on crypto, once they legalize it. How can they offically take tax from soemthing which is not yet legal in thier country.
However i do not believe this is the fianl verdict of the government, there may be many twists and change in statements. Consider the example of russia as they also given such statemnets of legalization of bitcoin and then not to legalize it.
Governments look really confused when it comes on the legal status of bitcoin.

When will we be stopped tackling this damn country? for all my years here in crypto ..  India had been in the news here and there about their inconsistent stand in crypto currency.

I think we should stop mentioning this country until they find the right way in treating this currencies.

Now here they are putting confusing  Bill? are they playing around us here?

Well they're making the conditions become worse than previous, I don't see any reason why should Indian citizen using local exchanges (e.g. WazirX) instead of using decentralized exchanges to hide laws and tax avoidable. This is just like double standard, they don't allow their citizens to have crypto since it's illegal sources... but they do taxed the illegal sources to earn money. Until Bitcoin will be accepted or legal tendered in various citizens, we will see other country will unbanning Bitcoin.

Possible but I don't see that they are playing their citizens emotions but in regardless on what the situation there would be always those kind of reactions whatever decision they would be making
and its just normal that people would really be having that confusion in mind.

Whether they would be legalizing it so that they could tax on it or would totally get rid by banning it but of course they would be losing that taxation.So if their government
would really be spotting out on the probabilities in terms of benefits then we might be seeing some legalization.

For many years now, the Indian government has had been holding the cryptocurrency industry - which is very much a booming industry in India - in great suspense as to how it will really treat it under its regulatory power. And we in the outside assumed that because it is about to tax crypto transactions and income it can mean that it is now signaling of its eventual legalization. So we are so wrong with this assumption because the two topics are essentially not related to each other as the country has a history of grabbing tax revenues from businesses they still considered to be illegal. Funny but if they can tax illicit distribution of harmful drugs maybe they will also do it. Anyway, we are still hoping that eventually the government can have a unified stand on this matter and there will be no ban whatsoever because they could have done it months ago...we know that they are really salivating of the tax they can get from cryptocurrency business.

It is like they're testing the emotions of the people. If someone have come out to protest, then this could've been made a big drama. Now the government is in a situation not to make any decision on it. Only for the reason it is being taxed heavily and hasn't given any statement on its legality. The government might've thought that people will confess and start paying taxes, but that isn't happening. The targeted revenue out of crypto taxation isn't possible, because people look for alternate ways to use it than paying such a big tax to have our own freedom on finance.

It's so funny when these guys get this confused on what step to take. This si so out of place on there side, abnormal or illegal taxing of cryptos. I'm having a thought here and

1. Its either they are test run how possible it would be to tax crypto facilities and crypto earners. In a way, they could see how much that could be generated from this activity or
2. They raised the quota so high so as to discourage those engaged in any crypto related activities.

In anyway, even if I am wrong, they are greatly confused with there stands, calling it illegal and yet taxing  it. If you ask me, that's what bribery feels like.

The legality of Bitcoin is discussed for a long time here in this forum and you could find many threads talking about the ban unban and many more theories about how India is going to deal with the entire cryptocurrency market. I am not sure about the volume of investors in the space from India but taxing them means it is legal in India and years long rumors of banning bitcoin and cryptocurrency are false.

If the government were planning to ban the entire market, i am sure they will not add them in the tax bracket.

They couldn't make up their mind towards crypto. If they don't know the status of crypto in their country, how can they tax their citizens? Because if their citizens don't know if usage is legal or not, more than likely, their people will hide their crypto transactions from their government so how can they be taxed? India may have confusing stance towards crypto because, they want to get a hold of their crypto users by taxing them, and yet, they don't want to legalize the use of it yet. 

The US has the same thing where if you have a source of illegal income you still have to pay taxes on it. Because if you do get caught, on top of everything else you get hit with tax penalties and possible criminal tax avoidance charges. There are other countries that behave the same way.

Laws and politicians may come and go, but the tax people always get their money.


-Dave

They would be always having that decisive point depending on whats up into their minds and ending up neither they would be legalizing it or totally bans it and its true
that they couldnt impose taxes on something which isnt even considered legal and you would really be boggling up your mind on whats happening which it isnt
really surprising that certain conditions could really give out  these kind of scenarios which it isnt really that surprising.They are the ones who do have
the final say on which path they would be taking on.

So if not legal yet, using cryptocurrency will consider a crime? It's like some countries have been taxing alcohol drinks but it's illegal I'm their country. India making drama form while. They just make things more complicated and encourage people to use cryptocurrency in the black market. Officially announced about Tax, but not yet finalized whether it's legal or illegal. It's just a ridiculous statement to me, not only confusing.

Yes, they have always been taxing what is not legal. Gambling they tax heavily and gambling is not legal within the territory of India but yet from the very start gambling income is taxed heavily in the country. Even though I don't agree with this sort of draconian law on crypto but still 30% tax is still bearable. What is not at all bearable is the hefty 1% TDS that will be levied on sale proceeds every time you will make a sale. This doesn't make any sense and is irrational and is a deliberate technique to stop crypto trading in India. What I see from here is that they might in the coming months ban the foreign exchanges altogether and then eventually ban cryptos. They think this way they might get rid of it in phased manner.

Recently India has passed a crypto bill to tax crypto income by 30% but at the same time claiming that taxing cryptos doesn't make them legal and states it's country's sovereign right to tax crypto and this atrocity doesn't stop here as they have mentioned that the decision about banning crypto or legalizing it will taken after further consultation.

Can they tax something which is not legal? How can a country tax something which is not legal? Moreover they still have plans of banning crypto since they are not clear about their stands on legalization. Not sure if it's an attempt to unofficially break the crypto market in India or what's going on.

Share your thoughts on this.

Source: https://www.businessinsider.in/cryptocurrency/news/taxing-cryptocurrencies-does-not-give-them-legal-status-clarifies-indias-finance-minister/articleshow/89500097.cms