Indian Investors Reject MPs 50% Over ‘Ignorant’ Crypto Tax Request

Crypto investors deem Indian politician’s tirade forgivable – Photo: Shutterstock

Homegrown cryptocurrency investors last week rejected MP Sushil Kumar Modi’s call to raise India’s crypto tax to 50%, citing “ignorance” and irrelevance as it does not is not part of the Department of Finance.

“I would freak out if the finance minister had made those comments. But, I’m sure the crypto industry is working very hard to dispel this ignorance and I hope the government is receptive to feedback.

“Because nobody wants peer-to-peer money to replace rupee,” said a Bengaluru-based blockchain entrepreneur.

Bitcoin to US Dollar Chart (BTC/USD)

“Some of Modi’s comments didn’t make sense. He said no one knows about crypto. Lots of people do. You just have to make an effort to understand it,” he added.

No crypto ban in India

Modi (unrelated to the Prime Minister of India) described investing in digital tokens such as BTC or ETH as akin to gambling, and called for the recently introduced 30% tax rate to be increased to mind-blowing levels. Modi, who is part of the ruling Bharatiya Janata party, is a member of the upper house of parliament, called the Rajya Sabha.

While the recent fiscal framework gave relief to investors concerned about a possible crypto ban in India, the entrepreneur said current levels are already high enough.

Indian crypto tax

“The 30% crypto tax in India is really really high because it means the returns we provide to clients will have to be above that rate,” he told Capital.com. His startup will be rolling out a cryptocurrency yield platform in India in the coming months.

For now, the South Asian nation’s 30% tax on crypto profits will only apply to transactions where traders liquidate crypto holdings in Indian rupees. India’s rules are in line with Austria’s 27.5% tax on crypto gains, which the Alpine state introduced in late March.

Modi’s demand for a 50% tax on crypto in India is “shocking”, said Nagaraj, a computer programmer based in southern India. The region is home to many top tech startups and software exporters.

Back to a gold standard?

Nagaraj pointed to global geopolitical concerns as supporting the case for cryptocurrencies like bitcoin and ethereum, contrasting US President Richard Nixon’s move from the gold standard in 1971 to the establishment of payment channels linked to gold related to Russia.

“What is the underlying asset of a US dollar today?” Nagaraj asked. In 1971, the US administration under Nixon ended the convertibility of the dollar into gold.

“News from Europe shows that Russia is moving towards the gold standard. If there is no underlying asset for a currency like the US dollar, then why not crypto? Nagaraj observed.

“I believe the underlying value of crypto is that it has no bank fees or transaction fees.”

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BTC, TAX coin in wooden letters with thinking manSeparating taxation from regulation is crucial, says Gauri – Photo: Shutterstock

Tax versus regulation

Pratik Gauri, founder and CEO of 5ire.org, a UAE-based blockchain startup, told Capital.com that separating tax from regulation is crucial and warned against excessive criticism of statements by Modi.

His company develops solutions for some government agencies in India.

“The (Indian) government has chosen to move from an outright ban to higher taxes on crypto assets, which is an improvement. All companies are moving to greener pastures for better processing.

“The rich taking their money to Switzerland, or Binance moving their operations to Malta cannot be considered an injustice,” says Gauri, a climate reality leader trained by former US Vice President Al Gore.

The Crypto Industry Needs to Explain More

“I think the crypto industry needs to do a better job explaining its usefulness. Calling government officials unreasonable and old-fashioned never solved the problems.

“Associating tax regulations with an outright rejection of crypto or blockchain technology is at best unfair and damaging,” Gauri added.

Regardless of how right to approach lawmakers about crypto taxes, the market itself matters, with the Indian rupee being the fourth-largest currency for bitcoin conversion in Asia.

India’s Department of Economic Affairs, part of the Ministry of Finance, did not respond to Capital.com’s request for comment.

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Indian Investors Reject MPs 50% Over ‘Ignorant’ Crypto Tax Request


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