Small towns and cities in India are becoming active hubs for crypto trading and investments, despite the steep taxation policies of the government, claim recent media reports. The increasing number of crypto investors from Tier 2 and Tier 3 cities of India reflect the positive adoption of crypto in the country that, for long, has an attitude of disdain towards the sector.
As per a report in The Times of India, tier 2 cities like Botad, Barbaka, Jalandhar, Patna and Guwahati are increasingly finding crypto enthusiasts who like to dabble in Bitcoin and memecoins amid the ongoing bull run. India doesn’t recognize cryptocurrencies and imposes a steep 30% tax on any capital gains plus an additional 1% TDS.
As per the TOI report, local investors are more into meme coins which make up a total of 13% of crypto investment in the country. Dogecoin is at the top of the list of the most invested coins on the other hand SHIB is one of the most traded coins. People under the age of 35 are being attracted to invest more in crypto in India compared to other age groups. Cryptocurrency occupies a unique space it has captured the imagination of many individuals and businesses.
India’s cryptocurrency regulation has undergone significant evolution over the past few years. In 2021, the Indian government proposed the Cryptocurrency and Regulation of Official Digital Currency Bill. The government introduced a tax on cryptocurrency transactions in 2022 to mitigate speculative trading. In March 2023, the Finance Ministry extended the Prevention of Money Laundering Act (PMLA) to encompass Virtual Digital Assets (VDAs).
In 2024, the Securities and Exchange Board of India (SEBI) proposed a multi-regulator framework for overseeing cryptocurrency activities. Cryptocurrencies such as Bitcoin and Ethereum are legal in India but are not recognized as legal tender. However, there is no specific regulatory framework for trading and holdings in cryptocurrencies. Cryptocurrencies are legal in India but official recognition is still not given to them as legal currency.
Despite of having such high taxes on cryptocurrencies in crypto transactions in India, young people of India are interested in crypto investment. Currently, the tax on cryptocurrency transactions is 30% while 1% TDS is assessed annually on transactions exceeding more than Rs. 50,000. However, the Indian government has done many debates to address risks and concerns in the Crypto space.
Also Read: Bhutan Now Owns $1 Billion in Bitcoin; What About India?
