A survey reveals high crypto taxes and AML rules are pushing Indian investors towards traditional finance, urging reconsideration of tax regulations.
A recent survey by the New Delhi-based Esya Centre reveals the significant impacts of India's high crypto taxes and anti-money laundering (AML) rules on investors. The findings suggest a need for tax policy revisions to foster a more favorable environment for cryptocurrency investments.
Key Points:
Survey Overview:
Conducted by Esya Centre in March and April.
Included 1,342 highly educated respondents from Ahmedabad, Bengaluru, Delhi, Jaipur, and Lucknow.
Focused on the impact of crypto taxes and AML rules on investment behavior.
Investor Awareness and Preferences:
58% of respondents are aware of crypto tax regulations.
52% are knowledgeable about AML laws.
93% prefer collateralized stablecoins over algorithmic ones.
Impact of AML Rules:
Shift in investment preference towards equity over crypto by 8%.
Requirement for crypto businesses to register with the Financial Intelligence Unit under the Prevention of Money Laundering Act.
Effects of High Crypto Taxes:
High taxes have remained unchanged since 2022 despite calls for a reduction.
Increased knowledge of tax regulations led to a 10% rise in crypto investments and a 15% increase in using foreign crypto platforms.
The government blockage of nine offshore exchanges reversed some trends.
Recommendations:
Esya Centre suggests revising tax rules to prevent offshoring.
Advocates for government consultations with crypto exchanges to promote responsible engagement in the crypto market.
Investor Sentiments:
Crypto assets are seen as attractive for additional investment and cross-border transactions.
NFTs and stablecoins are less lucrative compared to crypto assets.
The Esya Centre's survey highlights the pressing need for India to reconsider its high crypto taxes and AML regulations. By addressing these challenges, the government can create a more favorable environment for cryptocurrency investments, preventing offshoring and promoting responsible market engagement.
Source: Coindesk
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