Indian cryptocurrency traders will have to pay a 30% capital gains tax after the Government passed a controversial tax law on Friday. As if that wasn’t enough, the lawmakers also added a 1% tax deducted at source for crypto transactions. Further, taxes will also be imposed on crypto gifts.
The new rules apply for everyone, including those crypto traders who record losses. The thing is that according to the legislation, there’s no way of getting any deductions for losses. In turn, industry experts believe, this could lead to a major halt in the Indian cryptocurrency business.
Can Indian Laws Kill the Crypto Industry?
The Indian crypto industry was hoping certain amendments were going to be passed on Friday along with the tax laws. However, the lawmakers decided not to listen to the pleas of major crypto exchanges and NFT marketplaces.
As a result, industry leaders now believe the new law could lead to the end of the crypto business in India. According to Sumit Gupta of CoinDCX, the new tax “can kill the crypto industry.” The founder of a major Indian NFT platform Colexion, Abhay Aggarwal, also expressed the disappointment with the new legislation, saying it would lead to a serious reduction in “mass adoption and validation.”
Cryptocurrency Taxes by Country
While the Indian crypto tax of 30% tax is certainly high, there are some countries that have even higher rates. For instance, over in Australia, the tax rate of 50% is charged on long-term capital gains. In Canada, the tax goes to as much as 33%, while in the Netherlands, the highest rate is 33%.
In the United States, the tax rate on capital gains can be anywhere from 10 to 37% on short-term gains, while long term-gains are taxed from zero to 20%.
Still, there are some countries where the crypto taxes are much lower. For instance, in the United Kingdom, a basic rate is 10% of capital gains, while high earners have to pay two times as much.
In addition, there are also some countries that charge zero tax on cryptos, such as the following:
- Germany (for amounts under 600 EUR)
- El Salvador (no capital gains tax for foreign investors)
- Portugal (zero tax and the cryptos are exempt from VAT)
- Singapore (similar deal as in Portugal)
On top of everything, there are also some countries in which Bitcoin and other digital currencies remain unregulated. As they fall into a grey area, those countries charge no tax on any kind of crypto transactions.