India is currently proposing a common framework for G20 countries to deal with crypto assets regulation. Following this, the finance minister Nirmala Sitharaman announced during the Peterson Institute for International Economics meeting in Washington D.C. that India wishes to develop a unified approach to crypto assets.

In order to do this, various side events have been proposed during G20’s Spring meetings. Additionally, it will also discuss the Financial Stability Board’s paper on crypto regulation.

The Government of India has implemented a 1% Tax Deduction at Source (TDS) on every crypto transaction and a flat 30% tax on the profits of virtual digital assets in February 2022. This generated an income of Rs 157.9 crore ($19.2 million) in TDS for FY2022-23.

Unfortunately, this taxing policy adversely affected the users of the Indian cryptocurrency ecosystem. A dYdX Foundation survey revealed that 44% of users reduced their transactions on centralized and decentralized platforms due to increased taxes. Moreover, it was also revealed that 60% of the Indian Web3 startups are registered outside of India, implying that the taxing policy is not productive for business.

The Indian minister of information technology, however, made a statement implying they do not intend to inhibit innovation. He affirmed that they wish to maintain security and intelligence objectives while providing ease of doing business and living.



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