Binance has the coveted position of the world's largest crypto exchange. This means a large user base comes from various countries and that includes India which happens to be the world's most populous country.
With such a huge population the interest in crypto both for the purpose of trading and investing is growing.
Indian government does not like foreign crypto exchanges
The Indian government has imposed a 30 percent tax on crypto and 1% TDS on each trade. This 1% TDS or tax deduction at source applies to every transaction.
So irrespective if a user makes a profit or a loss this 1% TDS applies to every trade.
Since Indian laws apply to the companies working from the Indian soil therefore international exchanges such as Binance have been out of the ambit of these laws.
What this has meant for the Indian users is the ability to trade directly with these International exchanges and bypass the taxes and TDS imposed by the government.
The Indian government imposed an IP Ban on these exchanges.
The Indian government had imposed a ban on the IP's of a long list of foreign crypto exchanges.
This was done in order to deter the Indian users from carrying out trades on these exchanges.
However a large number of Indian users are into crypto and are known to be quite an innovative lot. A lot of them may be finding ways to bypass the IP ban imposed on the IP's of these exchanges which includes Binance amongst others.
The ban could have meant new users may be having difficulty in opening their accounts on Binance.
Binance decides to comply with the Indian Law
Binances has reportedly decides to serves new customers on the indian shores by way of
- Reportedly it would have to pay a fine of $2 million as penalty. This amount is yet to be confirmed by Binance.
- It is also agreeing to comply with the PMLA or prevention of money laundering act.
Binance has decided to become registered with FIU or the Finance Intelligence Unit which comes under the finance ministry of India.
The FIU has been given the responsibility of keeping an eye on the trade of virtual assets or VDA.
For Binance to be able to operate in India it would have to comply with the Indian laws
If we see this in terms of the data that each user generates by virtue of the trades he undertakes. Binance like Indian exchanges would be required to deduct a 1% TDS on all trades and it may be required to share the transaction details with the tax authorities in India.
While the government focuses on the taxaction the Indian crypto & blockchain industry has been rallying for lower taxes and the government's support for development of the industry and projects.
India may have the technically qualified workforce and some of the finest minds involved in the industry however without the support of the government they have no other choice other than leaving the country and setting shop on more crypto friendly shores.
This report is based on the news appearing here
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Posted Using InLeo Alpha