India's Crypto Tax Regime Criticized As 'Draconian'

According to Cointelegraph, a legal practitioner has criticized the Indian government's stringent crypto tax policy, describing it as an attempt to displace blockchain and crypto technology due to concerns over illicit activities. Amit Kumar Gupta, a legal practitioner at the Supreme Court of India and the Indian Institute of Technology-Kanpur, presented a research paper on crypto taxation at the Peer-to-Peer Financial Systems Workshop 2024 in Dubai. Gupta argued that the heavy taxation on India's crypto and blockchain space stems from a lack of understanding among Indian regulators about the real uses and potential of Web3 technologies. India's crypto law, which mandates a 30% tax on profits without allowing users to offset their losses, came into effect on April 1, 2022. Gupta highlighted that there is also a tax on each crypto transaction made by users. He described the taxation regime as 'draconian' and believes it is intended to discourage the use of cryptocurrency, which the government views as primarily associated with money laundering and terrorist financing. Gupta noted that the Indian government perceives crypto as 'worse than gambling' and suggested that the stringent tax regime could drive Indian crypto entrepreneurs to relocate to jurisdictions with clearer regulations. Despite the regulatory uncertainty, tech startups in India continue to work on Web3 projects. Rohit Mohan, CEO of India-based Web3 marketing firm NC Global Media, stated that while India remains cautious about cryptocurrencies, its developers are still driving innovation. Mohan emphasized that major players are entering the market and that India has the potential to set a strong example globally. He also stressed the importance of education and collaboration in fostering user understanding and adoption of crypto technologies.