- Date : 25/03/2022
- Read: 4 mins
- Read in हिंदी: 4 तरीके कि क्रिप्टो टैक्स एक्सचेंजेस के लिए कैसे फायदेमंद है
Since the Indian government has introduced a tax on the earnings from the trading of cryptocurrencies, many people have started to invest in digital assets. This has given a new boost to the exchanges dealing with digital assets.
How Exchanges Benefitted From Crypto Tax
Cryptocurrencies are modern investment assets that have the potential to provide dreamy returns in just a short time. The gaining traction of these investments has attracted governments worldwide to benefit by implying taxes. Many countries have imposed taxes on the gains resulting from cryptocurrency trading and investing. During the budget of 2022, the Indian government also stepped up and introduced new taxation slabs and laws pertaining to cryptocurrency investing and trading.
The Indian government has proposed a 30% tax on gains from buying and selling virtual assets like cryptocurrencies, virtual real estate in the metaverse, and even Non-fungible Tokens (NFTs). As of now, there are hundreds of cryptocurrency exchanges operating in India, and they all seem to benefit from the new tax. In this post, we will explain how exchanges will benefit from this latest move from the Indian government.
As the government introduces taxation on cryptocurrencies, many people will step up and start trading and investing in these assets. Different transaction charges are levied on transactions between crypto to crypto, crypto to fiat INR, and crypto to other foreign currencies. Usually, crypto exchanges charge 1% to 2% of the transaction value from their users to facilitate the transactions.
As the usage increases, exchange commissions will skyrocket, which will result in more income for the exchange.
Signs of Legalisation
The introduction of taxes has made people believe that cryptocurrencies might get legalised soon. Before the budget of 2022, experts, traders, and analysts thought that the government might legalise crypto assets in budget 2022. But the government had other plans. Currently, the government only focuses on introducing income tax on these assets, and it has also decided to introduce a central bank digital currency.
The open acceptance of blockchain technology by the Indian government has once again fuelled the signs of the legalisation of cryptocurrencies. In the near future, we might see cryptocurrencies legalised in India, and they may compete with other investment assets in the country openly.
More User Data With More People Signing Up
User data is the fuel for every business. With tons of new users signing up on Indian cryptocurrency exchanges, the companies will have more data to analyse than ever before.
Exchanges in India are offering crypto buying services for as low as Rs 100, and this low price has driven more people into the industry. As more people sign up for the services, exchanges can track their buying behaviours and the features they interact with. The presence of extensive data can help exchanges analyse and predict market movements and also improve their service offerings to a large extent.
Also Read: https://www.tomorrowmakers.com/stocks/planning-trade-cryptocurrencies-heres-how-read-crypto-charts-article
Better Track of Transactions
The main reason behind the introduction of taxes in the cryptocurrency domain is to track the transactions. Whether it is 1% TDS on transactions or 30% tax on gains from cryptocurrency trading or investing, the sole aim is to improve tracking.
When people pay taxes, exchanges need to provide them to the government, and for this, they need to track each transaction. Moreover, governments and exchanges can track transactions better with taxes because of the direct linking of bank accounts and PAN cards.
Exchanges no longer need to operate in the dark, and they can now fully track all transactions pretty quickly and help the government combat money laundering.
Cryptocurrency is an exciting world, and there is no end to the things you can do and explore in this domain. Due to the vast opportunities, the exchanges are diving into this and benefitting from various ways. Make sure that you also jump on the train and make some promising investments in the cryptocurrency of your choice.