"In India, the term "VDA" is defined in the Income Tax Act through amendments introduced in 2022. It includes cryptocurrencies, non-fungible tokens (NFTs) and any other digital assets the government may specify. VDAs are not legal tender, but individuals are allowed to buy, sell and hold them. India applies strict taxes on VDAs, including a flat 30% tax on profit"
"Issues under discussion include the absence of unified investor-protection rules, unregulated trading practices and concerns that India's 30% tax plus 1% TDS regime is pushing users to offshore platforms. Stakeholders are discussing a risk-based VDA framework, licensing requirements for exchanges and custodians, conduct-of-business standards, RWA-specific regulations and improved data and reporting systems. Proposed safeguards include clearer custody norms, defined insolvency procedures, stronger disclosure standards, reserve transparency and closer oversight of leverage and liquidity risks."
"India is home to more than 100 million crypto users, many of whom are younger and highly tech-savvy. Yet the country still lacks clear and comprehensive regulations for virtual digital assets (VDAs). A formal review of VDA policies is now underway. This could shift the current system, which focuses mainly on high taxes and basic Anti-Money-Laundering (AML) rules, toward a stronger framework that prioritizes investor protection."
India hosts more than 100 million crypto users, many of them younger and tech-savvy, yet lacks a clear, comprehensive legal framework for virtual digital assets (VDAs). VDAs are defined in the Income Tax Act and are not legal tender, but buying, selling and holding are permitted. Current policy emphasizes heavy taxation (including a flat 30% tax and 1% TDS) and basic AML obligations. A formal policy review is underway to consider a risk-based VDA framework with licensing for exchanges and custodians, conduct standards, RWA rules, improved reporting, and safeguards such as custody norms, insolvency procedures and reserve transparency.
Read at Cointelegraph
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