India has finally approved the 30% crypto tax proposed in the Union Budget 2022-23 by the Finance Minister. Implications also include 1% Tax Deducted at Source (TDS) on every crypto transaction. Experts believe that these rules can hit India with the biggest brain drain in history in the coming 8-12 months.
According to Reuters, It is estimated that there are around 20 million crypto investors in the country, which holds over $5 billion worth of digital assets.
Why India can be hit with crypto brain drain?
Earlier, People who were appreciating the little steps taken by the Indian government are now hinting at the brain drain that can be caused by these implications.
Sandeep Nailwal, Co-founder Polygon, who had to relocate to Dubai in 2020, told Bloomberg ‘the brain drain is absolutely crzy’. He Hinted that he wanted to promote the Web3 ecosystem in India but however, it didn’t make sense for the team to expose their protocols to local risks.
Sunil Sharma, founder of Asia’s largest crypto publisher, CoinGape commented, “India with its vast availability of IT skilled workforce can be next crypto hub and ease of doing business is most important to encourage crypto startups build in India. Tough taxation will drive this vast talent to other favorable geographies.”
As per CNBC, Shivam Thakral, CEO BuyUCoin, recently told that more than 30 engineers left the country to work in nations like Dubai, the US, and Singapore as they are developing crypto-free rules.
While, Sumit Gupta, CEO and Co-founder of CoinDCX, speaking at Business Today Crypto Conclave mentioned that tax provisions can have serious consequences for the industry. Both the investors and developers can move away to other countries,
He added that countries like Dubai, Thailand are in the process of becoming crypto hubs due to their approach towards the regulation. This is attracting a lot of investments and talent from all over the world.
India still awaits Crypto bill
Meanwhile here in India, RBI governor Shaktikanta Das once compared tulips value with cryptocurrency. Billionaire investor Rakesh Jhunjhunwala calls for a ban on digital assets and says that he won’t buy Bitcoin for even $5.
India is yet to introduce the bill related to Virtual digital assets in the parliament. It has been postponed session after session. On one hand, crypto investors and industry heads are waiting for some positive regulations from the government, on the other hand, the government is only focused on taxing the gains. This shortly summerise why developers and investors are flocking to crypto-friendly nations.
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