Amit Kumar Gupta, a legal practitioner, stated to Cointelegraph that the Indian government’s posture on cryptocurrency is indicative of a lack of comprehension of the technology.
A lawyer has claimed that the “draconian” crypto tax imposed by the Indian government is an effort to silence advocates of blockchain and cryptocurrency who see it as a tool for criminals and terrorists.
Amit Kumar Gupta, a legal practitioner at the Indian Institute of Technology-Kanpur and the Supreme Court of India, delivered a research paper on crypto taxation in India at the Peer-to-Peer Financial Systems Workshop 2024.
Gupta clarified that the crypto and blockchain sector in India is subject to significant taxation but lacks regulation. In an interview with Cointelegraph, the legal practitioner stated that this is due to the fact that Indian regulators are unaware of the true potential and applications of Web3 technologies.
On April 1, 2022, India implemented its crypto law, which mandates that citizens pay a 30% tax. Gupta maintains that the tax is applicable to profits, and users are unable to mitigate their losses. Additionally, he emphasized that users are subject to a tax on each cryptocurrency transaction they conduct.
According to Gupta, government officials’ ignorance of the technology is the root cause of the “draconian” tax policy.
Gupta informed Cointelegraph that the tax is intended to discourage individuals from utilising cryptocurrency.
The counsel emphasized that the Indian government regards cryptocurrency as “worse than gambling.” Gupta is also of the opinion that the tax regime in India will result in the exodus of Indian crypto entrepreneurs to jurisdictions with transparent regulations.
Gupta further stated that “any founder, trader, or individual who is involved in cryptocurrency or blockchain in any capacity, whenever they generate revenue, departs the country.”
In spite of the regulatory uncertainty in India, tech entrepreneurs persist in their efforts to develop Web3 initiatives within the nation. Rohit Mohan, the CEO of NC Global Media, a Web3 marketing firm based in India, stated to Cointelegraph that India’s developers are continuing to fuel innovation, despite the country’s conservative stance on cryptocurrencies. He elaborated:
“Major participants are entering the market. Although the widespread adoption of crypto may require time, India has the potential to serve as a global leader in this regard.” Mohan also emphasized the importance of education. According to the executive, user education and collaboration are of the utmost significance.
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