CONRAD DIAS
Ranchi, Mar 10: Trading of cryptocurrency in the last few years has been on a rise not only around the world but also in India. According to the exchanges, a total of around 105 million Indians own crypto assets and more than 1 million people trade cryptos. In Ranchi, many professional traders have been doing intra-day trading to earn their livelihood.
“The percentage return in crypto trading is way more massive than any other assets be it stocks or holdings. If someone has a proper idea of trading and investing in the right crypto, the person can earn profits of around 400-500%,” said Rohit Ignatius, a resident of Kanke who is a full-time trader and has been investing in cryptos since 2016.
“Majority of countries in the world have accepted cryptocurrencies with open arms and many have even taxed it, but India is probably the only country as of now which has such a high rate of taxation,” he added.
During the recent Budget Session, India’s Finance Minister Nirmala Sitharaman had announced that India will be taxing all ‘virtual digital assets’ at 30% from April 1, 2022, along with 1% TDS (tax-deductible at source) which will apply to every single transaction.
The reason behind heavy taxation is because the government believes there are problems related to crypto in India and heavy tax incidence will discourage the majority of the population from investing.
Arthur Savik, an employee of an airlines company is also into crypto trading and mining (method of creating cryptos) and keeps himself up to date with the market.
“I and my friends have been trading cryptos for the last 2-3 years and we have made a lot of profit from different coins, mainly alt-coins. With the recent decision taken by the government about taxation, I have put trading on hold for now but I am continuing with the mining of alt-coins such as Ethereum and Shiba Inu,” he said.
Gautam Prasad, a Chartered Accountant from Ranchi, explained the taxation of cryptos in detail.
“Cryptocurrency comes under virtual digital assets. There are mainly two important points about taxation. Firstly, 30% tax will be deducted on profits from any virtual digital assets regardless of the amount. If the profit is Rs. 1000 or Rs. 100, 30% taxation will be implied. However, the 1% TDS will only be applied on profits of more than Rs. 10,000. Secondly, unlike shares, the ‘Set off of losses’ does not imply cryptocurrencies. It means that if a portfolio has been in loss of Rs. 20,000 for FY 2021-22 and in the next year it is in profit of Rs. 10,000, then the loss of Rs. 20,000 will not carry forward. It will be considered as a complete loss,” he explained.
Despite the heavy taxation, many traders believe that there are quite a lot of loopholes in it and it will be tough to implement the tax.
“It is still not clear how Govt. will implement taxation on cryptos. Many traders use apps such as Binance or Coinbase which are not Indian exchanges. Also, if a trader has cryptos worth a million, and if he transfers it to his trust wallet app then no one will have any record on how much crypto the person is holding. In India, most crypto transactions are done through ‘peer-to-peer’ (P2P) through UPI. How will the government keep a track of which UPI transaction is for crypto,” said Prabhat Kumar, an entrepreneur and crypto trader.
As the taxation will be applied from April 1, many traders are still optimistic and believe that in future the government might reduce the tax rate or even remove taxation completely.
