India, which has been critical of cryptocurrencies, is now reevaluating its stance, influenced by changes in global perspectives, including those from the USA.
Background and Criticism
The Indian government, concerned about the risks of cryptocurrencies, previously imposed heavy taxes and stringent rules. For instance, traders were required to pay a 30% capital gains tax regardless of investment duration. In December 2023, the Financial Intelligence Unit of India cracked down on several offshore crypto platforms for regulatory non-compliance.
India's Policy Changes
Influenced by global changes in the perception of digital assets, India decided to revisit its regulations. This decision comes as more countries begin to recognize and integrate cryptocurrencies into their economies.
New Tax Measures
Starting February 1, 2025, the Indian government included cryptocurrencies under Section 158B of the Income Tax Act as Virtual Digital Assets (VDAs). Crypto profits are now taxed similarly to traditional assets. Tax evasion will result in a 70% penalty on undisclosed gains within four years of the tax assessment year.
The introduction of new tax measures in India marks a shift in the country's approach to crypto industry regulation, potentially leading to broader acceptance of digital assets.
