India announced the launch of cryptocurrency taxes effective April 1, when cryptocurrency gains will be taxed at 30%. This is one of the highest cryptocurrency taxes globally, and even higher than what is charged for gambling and lottery winnings in India.
Commenting on the new tax, Flora Li, director of Huobi Research Institute, said:
“To date, cryptocurrencies have been classified as financial services in India with GST of 18% applied to transactions on exchanges. With the upcoming 30% tax on profits generated by cryptocurrencies, we believe that this will dampen demand and discourage investors from trading and adding cryptocurrencies to their asset portfolios. In addition, the new tax will result in investment costs spiking over 50%, which will reduce the risk premium for cryptocurrencies and make Indian investors more conservative. The combination of these two outcomes will likely impact the crypto market in India in the short run. Long-term, however, we still believe that India, given its size and young population, continues to remain an attractive market for the cryptocurrency industry.”
