Govt. is working out its position on the legality of the Crypto currency:
Experts opine that the Government’s crypto elucidation on March 21st that that offsetting losses from 1 crypto trading pair against the profits from another pair will most likely result in lesser speculative trading. Shashi Mathews, a partner at Induslaw, said that the kind of speculative trading wherein people invest in some cryptos that come overnight and become less strong after a boom will be affected now. Mathews says that the Govt. is working out its position on the legality of the Crypto currency. The RBI (Reserve Bank of India) expressed its reservations repeatedly against crypto assets.
March 21st clarification is harmful to the crypto industry in India:
The leading crypto currency players called the Govt. March 21st clarification as regressive (in nature). This is harmful to the crypto industry in India and the investors says Ashish Singhal, cofounder of CoinSwitch, a crypto exchange. He expressed that the Union budget for the year 2022, has recognized VDA (Virtual Digital Assets), as an asset class that is emerging, and the normal course of action is to gradually bring in regulations on par with the other asset classes. And he says that a step backward was taken with this clarification instead.
The govt. has to be steadfast in its approach and not suffocate the industry:
WazirX cofounder Nishcal Shetty opined that the latest elucidation was a bad way of looking at technology and also said that the govt. would alter its stance on this matter. The main reason why the countries are taking careful steps in the taxation of Crypto is Discouraging Crypto is the same as Discouraging Innovation. Gaurav Dahake, the founder of Bitbns, a crypto trading platform, feels that the new clarification will result in a fall in overall transaction volumes by thirty to forty percent. He wants the govt. to be steadfast in its approach and not suffocate the industry. He says that this (excessive) taxation by the govt. will move the (crypto) investors out of India.
Investors were attracted to Bitcoin as it breached the sixty-five thousand dollars mark:
The one thing that gained traction in the sub-continent after the covid-19 pandemic is the crypto trading. India’s largest crypto currency exchange, WazirX, registered yearly trading volumes of forty-three Billion dollars in the year 2021. More investors were attracted to Bitcoin as it breached sixty-five thousand dollars in February, April, and November. There were rumours about the legalisation of VDA (Virtual Digital Assets) after crypto currency trading picked up in India.
30% tax rate is very high:
In the budget, the Govt. made it clear that there will be a thirty percent tax on the income from the transfer of any VDA. Mathews says that this is a direct hit to the profit so the investor has to re-strategize. This is prohibitive taxing meaning to say that the tax rate is very steep. The message from the govt. is that you must not get into this from a risk perspective until a framework is built for safeguarding traders and investors.