India’s Ministry of Finance has reaffirmed that there are no intentions to revise the 30% tax on cryptocurrencies or approve Exchange-Traded Funds (ETFs).
Refusal to Change Tax Policy
The Ministry of Finance in India has announced the continued enforcement of the rigorous tax rates on cryptocurrencies established in the 2022 Union Budget. This includes a flat 30% tax on profits and a 1% tax on transactions exceeding INR 10,000, making India's tax policy one of the strictest globally for cryptocurrencies.
Crypto Market in India
The Indian crypto market is projected to reach $6.4 billion by 2025. However, the lack of ETF approval and restrictive tax policies pose a threat to its growth. According to Chainalysis, India ranks third globally for cryptocurrency adoption, with a transaction volume of $2.1 billion.
Experts' Opinions and Consequences
Experts and users on X have expressed concerns that strict tax policies may lead to talent and capital moving abroad. Critics such as Nimesh and Dr. Maulik Modi argue that the government is overly focused on revenue at the expense of innovation. Additionally, while countries like Bhutan utilize cryptocurrency for economic growth, India's hesitance may hinder its competitive edge.
The firm stance of India's Ministry of Finance leaves uncertainty for the future of the country's crypto ecosystem, potentially diminishing its position on the global stage.
