The conundrum going around the Financial Stability Board’s consultative report Regulation, Supervision and Oversight of Crypto-Asset Activities and Markets, has led to a stir in the crypto world and seems to impact the crypto taxation process as the taxation season is here. Experts believe one will finally be able to identify issues and challenges related to crypto taxation activities.
Interestingly, India’s cryptocurrency investors will now be able to claim the Tax Deducted at Source (TDS) refunds, whenever applicable. It is expected that this process can include more transparency in the fast-growing Indian cryptocurrency market and help establish trust in the ecosystem. On the taxation period going around, Punit Aggarwal, founder, KoinX, a crypto taxation platform, talks about how ahead of the Income Tax Return (ITR) filing season, taxation platforms are upgrading to cater to diverse tax filing needs of individuals, tax practitioners, and businesses. (Edited Excerpts)
To what extent the new regulations will renew interest in crypto post the 30% tax?
According to the Indian government, all profits made from crypto transactions are taxable at a flat rate of 30%. These rules were introduced during the 2022 Union Budget and are governed by Section 115BBH of the Income Tax Act, 1961. I think that 30% is a lot to bear with and this may have a negative impact on the crypto players. It is expected that many will slowly lose interest in crypto. But with the recent developments such as the passing of crypto regulations by the government, there is a hope that the crypto industry will not wither.
How do you plan to simplify the crypto taxation process, looking at the expected complexity of the field?
Looking at a user journey, they first trade into crypto assets and then comes a taxable event, where he needs to pay his taxes or calculators taxes. And finally, he needs to file his income tax return, which in itself is quite a complicated process. By collaborating with other crypto taxation platforms, we hope to simplify taxation by interconnecting taxation procedures with just one click. Also, we are taking many initiatives to upgrade our safety structures. Our recent initiatives include a partnership with ClearTax, a platform catering to diverse tax filing needs, for simplifying crypto taxation processes.
Endless controversies seem to have driven users away from crypto. How can we remove or lessen this fear?
Recently a survey made by WazirX, a crypto platform, revealed that 75% of respondents understood how crypto is taxed in India, 16% claimed to have some knowledge, whereas 8.9% weren’t aware of it. I expect that the Indian market is quite adaptive to new technologies but whenever crypto assets come in, they are unaware of the potential of this world. This is what restricts more people to get involved with the use of crypto assets. Eventually, crypto platforms such as CoinDCX, ClearTax and KoinX, among others, have taken initiatives to educate people about crypto taxes and everything related to the crypto world.
What are your views on the passing of the “same activity, same risk, same regulation,” by the Financial Stability Board?
The entire volume of the cryptocurrency market over the past few days has significantly increased by 3.77% to reach $23.93 billion and increased about 44.69% in the previous day (July 24, 2023, 13:00 IST
Follow us on Twitter, Facebook, LinkedIn
[ad_2]