Tag Archives: tax

Playing Safe With India’s New VDA Tax Rules With Anndy Lian

Playing Safe With India’s New VDA Tax Rules With Anndy Lian

Anndy Lian, book author of NFT: From Zero to Hero commented on India’s VDA rules.

India’s new tax rules for cryptocurrencies were introduced in the 2021 Union Budget and are known as the Voluntary Disclosure of Income Scheme (VDIS) rules. The rules require individuals who own cryptocurrencies to disclose their crypto holdings and pay taxes on any capital gains they may have earned. According to the new rules, if an individual has held cryptocurrencies for less than 36 months, any profits they make from selling the cryptocurrencies will be considered short-term capital gains and will be taxed at the individual’s marginal tax rate. If the individual has held the cryptocurrencies for more than 36 months, the profits will be considered long-term capital gains and will be taxed at a rate of 20% with indexation benefits.

Additionally, the new tax rules require individuals to pay taxes on any cryptocurrency income that is not from capital gains, such as mining or staking rewards. This income will be taxed as per the individual’s marginal tax rate.

The new tax rules are aimed at bringing greater transparency to the cryptocurrency market in India and ensuring that individuals who own cryptocurrencies pay the taxes owed on their crypto-related income.

Anndy’s humble advice is “Use regulated exchange and pay your taxes in India.”

Anndy continues to talk about ZK-rollups.

ZK-rollups (ZK-rollups) are a solution to scalability problems faced by many Ethereum developers. They allow faster and cheaper transactions on the Ethereum network while maintaining the security and decentralization of the blockchain. By aggregating multiple transactions into a single compressed transaction, ZK-rollups can significantly reduce the burden on the Ethereum network and increase overall efficiency in the system. The value of such a tool for the cryptocurrency industry is that it greatly reduces the cost of processing data, without compromising the security or decentralization that makes the monetary network unique.

The application of ZK technology allows blockchain networks to prove its authenticity of its operations in the most efficient way using the fewest possible steps. This has the power to be a transformational tool for Web3 development. In 2021, ZK-rollups are expected to be a major area of focus and growth.

Artificial intelligence (AI) is also a field that is gaining significant attention and investment globally, including in India. Web3 and blockchain technology have the potential to solve productivity issues with AI by creating a more secure and decentralized environment for AI data and models. In a traditional centralized setting, there are often concerns about privacy and security of sensitive AI data and models, as well as issues around data ownership and control. However, these issues can be addressed through greater transparency, security, and accountability in the AI ecosystem if the blockchain technology and web3 are used.

For example, AI models can be trained on decentralized data sources, and the ownership and control of the data can be managed through blockchain-based smart contracts. Additionally, web3 and blockchain can help create a more equitable distribution of rewards for AI model contributors, which can drive greater collaboration and innovation in the field.

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
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India: Use Tax Compliant Platform To Comply With Budget

India: Use Tax Compliant Platform To Comply With Budget

Union Budget 2023 had to offer very little for virtual digital assets (VDA) sector. In fact, the Finance Minister carefully avoided even mentioning about the VDA. However, the industry players took it in stride by acknowledging the fact that they need to abide by the current dispensation. They have advised using tax compliant platform while are hopeful of rise in Web3 & Crypto adoption.

The recent budget has brought gains from overseas cryptocurrencies / VDA under the tax purview. Non abidance of which invites Rs 10 lakh penalty or seven year imprisonment.

“I think the adoption of Web3 and crypto has grown a lot in India. But pertaining to this with the VDA industry, stakeholders are kind of disappointed by the Finance minister not mentioning the sector in her Union budget speech on 1st of February,” said Anndy Lian, Author & advisor for the Mongolian Productivity Organization.

While providing a perspective from across the border and being a staunch advocate of cryptocurrency, Lian believes that the budget 2023 has established its priority towards tax collection.

“I would just want to say that don’t try to avoid TDS by using offshore. You may be penalized as per section 271C of the income tax Act if you are investing in a Crypto,” Lian warned adding that, “Try to use a tax compliant platform, again the words used are fairly ambiguous”.

Similar views were aired by other experts tracking VDA sector.

According to a recent analysis, India’s cumulative trade volume in VDA changed by INR 32,000 crore between February and October 2022. “We expected that in the 2023 budget, the government would t alter VDA taxation, thereby reducing tax burden and eliminating uncertainties. But sadly we are still holding last years baby!,” says Raj Kapoor, founder, India Blockchain Alliance.

He went on to add that VDA taxes impact both residents and non-residents. Without a clear set of criteria to identify when NRs in India become subject to taxation, it has now become critical to understand the status of VDAs, especially when they are exchanged via or sold to Indian citizens. Clear standards in this sector are required to clear the air and promote international investment.

Joining the bandwagon in support of VDA traders is Tax Expert, Sonu Jain, who says “Many Indian users were purchasing crypto assets using International Credit cards or funds transfer. This will now reduce significantly since the TCS has been increased to 20%.”

Concerned by the tax imposition, Jain said, “So every funds transfer under LRS will be leviable to 20% TCS. For example, If a user wishes to buy crypto worth ₹100, then ₹20 will have to be paid as TCS.” This will significantly reduce direct International crypto purchases by Indians..

India assumed the presidency of the G20 summit, and there are hopes with regards to the country moving towards a more favorable ecosystem for crypto in general. Most importantly, India has started 450 web3 startups with an average inflow of 1.3 billion dollars in 2022 according to DYDX foundation. According to media reports there are over 75,000 blockchain employees working in India, raking 3rd in the global list of employers.

 

Source: https://www.3-verse.io/3versetv/blog/use-tax-compliant-platform-to-comply-with-budget/BA-20230203181601187-721508

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j

Tax on virtual digital assets a concern for NFTs; impact may be short term: Experts

Tax on virtual digital assets a concern for NFTs; impact may be short term: Experts

A slowdown in cryptocurrency trading may have an impact on NFT transactions as well, although it could be a temporary phenomenon as investors await more clarity from the government.

The 30 percent tax on income from the transfer of virtual digital assets (VDAs) that came into effect from April 1 is a cause of concern not only for cryptocurrencies, which have seen a drop in trading volumes, but also for non-fungible tokens (NFTs) that gathered steam in India in the past year with the entry of sports and Bollywood celebrities.

“The immediate scenario is bleak for crypto and even bleaker for NFTs in India,” Raj Kapoor, strategic advisor at Acryptoverse, a crypto-marketing firm, told Moneycontrol. “NFTs in India will face a fallout with only unique models surviving. NFT creators here are popping up daily while collectors remain non-existent.”

Anndy Lian, Chairman, BigONE Exchange, a crypto trading platform, said the tax on VDAs in India will impact NFT sales.

“The overall market condition is not favourable. NFT sales will drop further and only the better assets will have a place in the crypto-verse,” he said.

He added that NFTs that are more speculative in nature and driven by profit will suffer hard when it comes to tax.

“The 30 percent is a big amount for those projects,” he said.

Vinu Peter Immanuel, a partner at Link Legal who tracks NFTs, said that with average trading volumes on top cryptocurrency exchanges dropping 80 to 90 percent from a few months ago, the impact will also be seen on NFTs.

“Since NFTs are traded mostly by using cryptocurrencies, any slowdown in cryptocurrency trading may have an impact on NFT transactions as well. Although it could be a temporary phenomenon where cryptocurrency investors have taken a step back and are waiting for more clarity from the government,” he said.

Short-term impact

However, Hitesh Malviya, founder of IBC (It’s Blockchain) DAO (decentralised autonomous organisation) said NFTs in India are not even a $10 million market in terms of daily sales.

“We have got limited traction here if we compare it to the west. In the US, marketplaces are doing over a billion dollar sales volume every month. Since it’s a limited market, I don’t see many people have got affected as we have less than 1 lakh Indians who have bought any NFTs,” Immanuel said.

Siddharth Jaiswal, founder of Sportzchain, said the new taxation policy will have a short-term impact on NFTs.

“For all of us, this is the first year for the cryptocurrency and NFT tax framework. For many, 30 percent may seem a lot, but if you see the kind of exponential returns, 30 percent may seem less. There have been exponential gains as well, to the tune of 300 to 500 percent, so 30 percent (tax) seems less. However, the same is subjective,” he said.

Malviya noted that while it’s a tough law for short-term traders as they will be required to pay 1 percent on each NFT trade, it would be fine for a long-term value investor like him.

“I don’t mind paying 30 percent tax on my crypto or NFT assets,” he said.

The government said a 1 percent tax would be deducted at source on the transfer of VDAs starting July 1.

“The TDS (tax deducted at source) on its own is causing major havoc for crypto exchanges because the high-volume daily traders have disappeared and these are the guys that provide liquidity to the exchanges. But this impact has so far just appeared on cryptocurrencies,” said Pratik Gauri, founder of 5ire. “Still, I think it’ll become more widespread and show up on all VDAs, precisely because the tax has some mandates, like not being able to write off losses from one deal into another that will have a significant impact on the trading on VDAs, be it cryptos, NFTs, or other VDAs.”

Positive outlook

While Lian and Jaiswal said the tax will have an effect on NFTs, they also believe the outlook for digital collectibles is positive.

“Utility-based NFTs should expect an increase. This increase would be in favour for the India market as they will help the industry to hit a new level of adoption,” said Lian.

He expects India to triple its NFT sales in the next year.

Sportzchain’s Jaiswal noted that NFT marketplaces are coming up with new strategies to smoothen the entire buying process, with less reliance on cryptocurrencies as the medium for buying these NFTs.

“For example, NFT marketplaces in India have introduced UPI as one of the payment modes to buy these NFTs. So a drop in the trading volumes will not adversely impact the market for NFTs,” he said.

Unified Payments Interface (UPI) is a real-time payment system that facilitates instant transfer of funds between bank accounts.

Acryptoverse’s Kapoor said NFT stakeholders should really look at India’s gaming sector for a strong product market fit with NFTs as this sector has exploded in the past year, recording 170 percent growth. Jaiswal also anticipates NFTs on game merchandise to see an upswing.

“Additionally, with metaverse applications also gaining momentum, the uptake of NFTs will only increase in the future,” he said.

However, Malviya said that in India, fan collectible NFTs are emerging with entertainment companies and actors launching digital assets to promote their movies or brands.

“While NFTs will be used as an emerging tool of branding by many lifestyle and entertainment firms, such NFTs will not value over time. These are hype-driven assets that might never get any value in the secondary markets,” he said.

 

Original Source: https://www.moneycontrol.com/news/trends/tax-on-virtual-digital-assets-a-concern-for-nfts-impact-may-be-short-term-experts-8378261.html

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j