A 70-year-old Indian MP and member of the upper house, Sushil Kumar Modi has given thought to impose as much as a 50% tax on cryptocurrencies. The news will definitely break the hearts of millions of Indian crypto investors.
The view came at a time when the Indian Finance Ministry is continuously engaging itself with numerous financial institutions such as World Bank, IMF, and others to form a regulatory framework to regulate cryptocurrencies.
“Nobody knows what is this crypto (sic),” Modi remarked. “That’s why we need to discourage and disincentivize” trading and investing in the asset class, he added.
Sushil Kumar Modi is the same person, who earlier suggested India to implement a capital gains tax on crypto income of more than 30%. This suggestion seems to have been accepted after the Indian parliament passed a finance bill and created a law to impose a 30% tax on crypto gaining.
On April 1, the government rolled out the first Indian policy on crypto and charged burdensome tax on crypto investors. The new finance bill also excludes the offset loss with gains made elsewhere.
However, it is not clear yet whether cryptocurrencies are legal or not in the country. The Reserve Bank of India’s stance over crypto has always been painful for crypto investors. Its deputy governor also asked for a ban on digital assets.
“They (the Indian government) are in the process of bringing law and in the coming days, they will decide about the fate of this crypto — how to treat this crypto — is it an asset? Is it a commodity? Is it a stock? Is it goods or services?” Modi said. “All these things have to be decided in the near future.”
Modi affirmed that all these moves from the authorities indicate the terrible future of cryptocurrencies in the country.
“The government has not said in so many words — that crypto is like gambling, it is like lottery, it is like a casino, it is like horse-racing — and in all these things the tax rates are very high,” Modi said in an interview.
Modi also asked the government to charge 28% GST (Goods and Service Tax) on the entire value of crypto transactions, which is similar to the existing tax category over gambling activities.
He also revealed the government’s stance on the legalization of cryptocurrency in the country. He stated that unlike El Salvador and Ukraine, India has no plans to make crypto a legal tender. Despite the popularity of cryptocurrencies, Modi advises young people to invest in mutual funds and the stock market.
