In accordance with a report by CNBC TV18, India goals to succeed in out to crypto industry stakeholders to ask inputs to make clear its regulatory framework for digital assets. A panel led by the Secretary of the Department of Economic Affairs (DEA) is about to publish a consultation paper on digital asset regulations within the country by October 2024.

Lack Of Clear Regulations Hurt Indian Crypto Investors

India is considering contacting crypto industry experts to streamline regulations surrounding the nascent digital asset industry.

In stark contrast to the country’s recent lack of enthusiasm toward the cryptocurrency industry, the Indian government is now mulling releasing a consultation paper, searching for industry stakeholders’ thoughts on efficiently regulating the emerging asset class.

In accordance with sources near the matter, a panel inside the DEA is tasked with drafting the consultation paper. The consultation paper is anticipated to be available between September and October 2024.

The urgency for clear regulations for cryptocurrencies in India can’t be overstated, because the country’s crypto industry still appears to be operating somewhere within the legal gray area. While clear laws exist regarding the tax implications of crypto transactions, the dearth of consumer protection against exchange hacks stays a priority.

The recent hack of WazirX, a number one Indian cryptocurrency exchange, lost customer funds totaling $235 million from one in all its multi-sig wallets. That is just the most recent example of how Indian crypto investors are essentially on their very own if the safety of their digital assets is compromised. 

Because the hack, the exchange’s token WRX has experienced a big decline in value, tumbling from $0.36 in March to around $0.15 in August 2024.

Nonetheless, WazirX has stated that it’s working toward restoring the balances of trades between July 18 – 21, 2024. Nonetheless, a legal apparatus for purchasers to depend on seems missing.

Merrier Times For Indian Crypto Investors Ahead?

India has cemented itself as one in all the biggest cryptocurrency markets on the planet, consistently rating amongst the countries with the best variety of crypto investors and traders. 

The present tax treatment of crypto transactions in India attracts a flat 30% tax on all crypto-related profits from trading, selling, or spending crypto. At the identical time, losses can’t be offset against any gains to cut back tax liability. 

A 1% TDS (Tax Deducted at Source) is imposed on the sale of crypto assets exceeding $595 ($119 in certain cases) in a single financial 12 months, discouraging retail investors from actively trading within the industry.

The Indian government’s move to hunt industry opinion on clarifying crypto regulations could possibly be seen as a positive sign for investors and traders. 

Lowering tax rates will surely attract more retail participation within the industry, enabling the federal government to expand its tax base while also allowing profit-making investors to pay less tax liability. It stays to be seen what the consultation paper will propose in the approaching months.