Zerodha founder says crypto investors accidentally got lucky due to taxation
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Nithin Kamath, the founder and CEO of Bengaluru-based digital trading company Zerodha, feels that owing to TDS and taxation announced on cryptocurrency, crypo investors got lucky.
“I think many Indian crypto investors accidentally got lucky due to TDS & Tax on Crypto announcement this budget in Feb. Activity & participation dropped significantly immediately. If not, many could have potentially been trapped trying to buy the dip & then averaging down,” Kamath said in a tweet.
Beginning April 1, 2022, a new framework of fixed 30% tax on income from crypto assets is in force, indicating that will have to pay 30% tax on earnings from digital currencies. From Assessment Year 2023-24, the taxpayer will be required to pay a 30% tax on cryptocurrency implying that all income from the transfer of VDAs (Virtual Digital Assets) in FY 2022-23 will be taxed at a 30% rate, with an additional TDS tax of 1% with a threshold cap of ₹50,000 per year on all trading transactions beginning in July 2022. Meanwhile, Indian crypto exchanges have seen increased activity in recent months, which might be attributed to the tax policy. As the TDS may reduce liquidity on exchanges, certain investors may benefit from cryptos as the taxation makes crypto trading legitimate.
By replying to the view of Kamath a Tweeter user Sunil Kumar said “The same thing happening with equity world wide, than why only crypto targeted by exchanges. Equity will fall more this year compared to other asset class. Be prepared for longest bear market which has just started. Zillions of printed money has not started its side effects.”
Another Tweeter user Dr Rajiv Agarwal replied to Kamath that “No because they lost the capital as price is falling every day and they will pay tax also. It is now just like any other share in the share market with much higher risk like small cap shares.”
Naerub Patel replied to Kamath with an interesting way and said “Not only Indians but whole world who believes in crypto are averaging down. You will see multiple fold in market cap in coming years.”
The worldwide crypto market cap is $1.16T, a 3.74 per cent reduction from the previous day according to CoinMarketCap, with Bitcoin having a market value of $548,343,088,955, Ethereum holding a market cap of $190,221,334,290, and Tether holding a market cap of $72,432,536,307, USD. Coin, with a market value of $53,839,215,915 and BNB, with a market cap of $45,237,446,703, round out the top five crypto currencies by highest market cap in the last traded session.