Crypto Tax Compliance in India Is ‘Very Low,’ Permissions Must Get Government Trust: Taxnodes CEO

Several cryptocurrency investors in India have failed to pay a 30% tax on profits made through cryptocurrency assets over the past two years, likely due to lack of regulatory clarity and lack of customer awareness, the firm has warned. Taxnodes cryptocurrency taxation, urging the community to pay their taxes. taxes on cryptocurrencies punctual. In a conversation with Gadgets360, the Singapore-based company highlighted that tax compliance on cryptocurrencies in India continues to remain “very low” since these taxes were first imposed in 2022.

Avinash Shekhar, CEO of Taxnodes, says there is a misconception that the government has no way to track crypto transactions, leading opportunists to believe they can evade taxes.

Shekhar urged Indian cryptocurrency traders and investors to ensure compliance with tax laws while filing their documents this year. Interacting with several market players on this concept, the CEO of Taxnodes said that it would work Web3 the industry would do well if the Indian community earned the trust of the government with discipline and compliance.

“To drive widespread adoption of cryptocurrencies as a viable investment option, it is imperative that startups, consumers and government bodies collaborate synergistically and adhere to government guidelines. This collaborative effort could result in the government implementing effective yet relaxed regulations,” Shekhar said.

In 2022, India’s finance ministry has brought the digital assets sector under its tax regime. As per existing laws, all income from cryptocurrencies in India is taxed at 30%. To keep track of these otherwise largely anonymous crypto transactions, the Indian government also imposes a 1% TDS on each crypto transaction.

Despite different requests from Web3 companies for reviewing and reducing these tax percentages, the finance ministry is yet to announce any changes in the policy.

Between 2022 and 2023, only 0.07% of cryptocurrency holders in India paid cryptocurrency taxes, a percentage relationship from Swedish technology research firm Divly had said last year. Shekhar further noted that the main reason for poor tax compliance in India stems from lack of awareness among taxpayers.

Until April 2023, the controversial 1% TDS on every crypto transaction reportedly recovered over $19 million (around Rs. 157 crore) to the government.

In February this year, CBDT Chairman Nitin Gupta had revealed that around Rs. 180 crore was collected through TDS collected on crypto transactions, during the fiscal year 2023-24.

Shekhar, analyzing the situation, noted that the main reason for poor tax compliance in India stems from a lack of awareness among taxpayers.

Affiliate links may be automatically generated – see our Ethics statement for details.

Fuente