India: 30% Capital Gains Tax and 1% TDS for Crypto

https://www.coindesk.com/policy/2022/03/25/indias-stiff-crypto-tax-legislation-becomes-law

"Indians will begin paying a capital gains tax of 30% on crypto transactions in just one week after Parliament passed a controversial tax proposal on Friday, sparking uproar and disappointment among those in the country's crypto industry.

In addition to the capital gains tax, Indians buying or selling crypto will have to pay a 1% tax deducted at source (TDS), as well as taxes on crypto gifts, with no ability to take deductions for losses. The crypto taxes will come into effect on April 1, while the TDS will start on July 1."

Wow, that's some huge taxes, let's run some numbers. Assuming I'm buying 1 BTC on Crypto.com Exchange.

Buy

Buy 1 BTC at $44,500

Trading fee is 0.4% of the BTC = 0.004 BTC, so I receive 0.996 BTC

My average price is $44,678.71

Sell

So when BTC goes up to $50,000 and I sell

$50,000 * 0.996 = $49,800

Trading fee is 0.4% of the dollar value = $199.20, so I receive $49,600.80

$49,600.80 - $44,678.71 = $4,922.09 profit a.k.a capital gains

Tax

30% of $4,922.09 = $1,476.63, so I'm left with $3,445.46

TDS

So for the TDS, I guess they add it to the exchange's trading fee? So if Crypto.com is charging 0.4%, so it will become 1.4% instead?

1.4% of 1 BTC will be 0.014.

1.4% of $49,800 will be $697.20.

Crypto Gifts

I guess this means if I send BTC from Crypto.com exchange to my friend's wallet, I got to pay 1% more on top of the withdrawal fee? Not sure how this works but definitely nothing good.

Conclusion

I think the exchange won't get much trading volume with this kind of taxes in play, maybe only the rich folks can afford it, normal folks will avoid crypto. Exchange lacking in trading volume = dead.

Glad we don't have this kind of nonsense in Singapore, that's why we are one of the most crypto-friendly countries in the world, keep it up please, don't screw this up.


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