India’s Crypto Tax Rules Remain Unchanged, No Bitcoin ETF Approval Expected

India’s Ministry of Finance has confirmed that cryptocurrency tax rules will remain unchanged, dashing hopes for a more favorable crypto regulation. The government has also ruled out approving Bitcoin or crypto ETFs in the near future.

India’s 30% Crypto Tax Rate Remains

According to the latest reports, India’s Ministry of Finance maintains strict crypto regulations, rejecting immediate changes to the 30% tax on crypto gains and approval of Bitcoin ETFs. Crypto India, a prominent platform on X, shared an X post, drawing the community’s attention to the country’s restrictive stance.

Notably, this decision solidifies the existing tax framework, which imposes a 30% tax on crypto profits and a 1% Transaction Digital Asset tax on trades exceeding INR 10,000. The government has also indicated that it will not approve Bitcoin or crypto Exchange-Traded Funds (ETFs) anytime soon, reflecting its cautious approach to crypto regulation.

Despite recent speculations of India embracing Bitcoin, the latest development makes a BTC ETF in India unlikely in the near future. As CoinGape reported, a spokesperson for the ruling party recently emphasized the importance of a Bitcoin Reserve, sparking anticipation that India might follow the lead of other global powers.

According to a recent CCN report, the Indian government announced its decision to stay away from immediate crypto regulation. India has admitted that crypto assets remain unregulated, and despite imposing steep taxes, it hasn’t collected meaningful data on the industry over the past five years.

India Lagging Behind in Crypto Race?

Significantly, the government’s lack of enthusiasm for crypto has resulted in many crypto companies relocating their operations overseas. In addition, the lack of clear crypto regulation has made investors vulnerable to hacks and thefts.

In 2023, WazirX, India’s largest crypto exchange, was hit by a $230 million cyberattack, prompting its relocation to Singapore for restructuring purposes. Another significant hack that shook the Indian crypto market was the $44 million theft suffered by CoinDCX last week.

Interestingly, Siddharth Sogani, CEO of Crebaco, a blockchain analytics firm, expressed growing concern over India’s crypto regulatory landscape, describing the situation as increasingly bleak. He noted,

Countries like the U.S. are regulating left, right, and center—and Indians are left with frustration. It’s been over 10 years since I’ve been fighting for regulations. I submitted several documents and even visited the Parliament, but no luck. Finally, I gave up and moved my business overseas.

In conclusion, India’s crypto landscape remains uncertain, with the government’s strict tax regime and lack of regulatory clarity driving businesses overseas. As the global crypto market continues to evolve, India’s reluctance to adapt its policies may further hinder its potential in this rapidly growing sector.