Sound of change: Coinswitch will not be able to buy cryptocurrencies on Kuber, all options for payment in rupees closed

Posted on 13th Apr 2022 by rohit kumar

The government's strict attitude towards cryptocurrencies in India and the decision of a heavy tax of 30 percent on profits from crypto or other digital assets and one percent TDS on crypto transactions in Budget 2022 have started showing color. The effect of this is that it is becoming increasingly difficult for Indian investors to buy cryptocurrencies in rupees. Earlier Coinbase and now Coinswitch Kuber have also closed all options on their app to buy cryptocurrencies with Indian Rupees deposited through UPI and bank transfer.

 

 

Crypto Exchanges on NPCI's Radar

 

In fact, after coming under the radar of NPCI, which monitors UPI payments in the country, Coinbase, the first US-based crypto aggregator, banned UPI payments for cryptocurrency purchases just three months after its launch in India. Now after Coinbase, crypto aggregation CoinSwitch Kuber has also taken a big step. According to the latest report, it has temporarily stopped all deposit services in rupees from its app. That is, buying crypto through UPI has been stopped. Apart from this, bank transfers through UPI such as NEFT and RTGS have been banned on the company's mobile app.

 

 

Banks became alert after the statement

 

Let us tell you that two days before this, the step was taken by the banks after the statement issued by NPCI regarding the use of UPI in the buying and selling of cryptocurrencies. Following the statement of NPCI, banks had stopped all transactions through UPI on Coinbase. It may be noted here that Coinbase has assured its users of the convenience of buying cryptocurrencies through UPI after entering India.

 

crypto is not legal tender in India

 

It is worth noting that the National Payments Corporation of India (NPCI) had issued a statement recently saying that it is not aware of any crypto exchange in India transacting through UPI. After this, banks first stopped UPI transactions on Coinbase. Cryptocurrencies are not legal tender in India and the government has also warned that investors will be at risk after investing in cryptocurrencies without a regulator. Because till the time cryptocurrencies are officially recognized as legal in the country, NPCI cannot approve UPI payments involving cryptocurrencies. All payments made through UPI in the country come under the purview of NPCI.

 

Huge decrease in trending volume

 

According to the report, the trading volume for crypto exchanges in the year 2021 was 14 million users. Which has been decreasing continuously since the government announced a tax on crypto. Following the government's strictness, wallet MobiKwik, which facilitates the transaction of cryptocurrency through UPI, stopped its services on April 1. Since that time, that is, between April 1 and April 11, the trading volume has fallen by more than 50 percent. According to the report, after the tax and TDS on crypto came into force on April 1, there has been a 55 percent reduction in transaction volume and 40 percent in domain traffic.

 

That much of the income from crypto will be deducted

 

Since last April, the rule of a 30 percent tax has been implemented on the profit made from crypto. Understand it in such a way that suppose you invested 1 lakh rupees in cryptocurrency, after this investment you got a profit of 50 thousand rupees, then the government will deduct 30 percent tax on the profit of this 50 thousand rupees in the form of tax, that is, you got from crypto. Out of this earning, Rs 15000 will go to the government's account. Experts said that this move will eventually make investors think twice while deciding where to invest their money in this risky crypto market, now its impact is first visible on crypto exchanges.

 

Tax will be levied on the gift taker

 

Apart from this, according to the new rule, in the case of gifting such digital assets also, he has announced in his budget speech to impose a hefty 30 percent tax. It can be understood in this way that if you give a cryptocurrency gift of one lakh rupees to someone, then to whom you are giving this precious gift i.e. tax will be applicable at the rate of 30 percent on the recipient. If you gift a cryptocurrency worth Rs 1 lakh, then he will have to pay 30 percent of it or Rs 30,000 as tax to the government.

 

Calculation of 1% TDS

 

TDS i.e. Tax Deducted at Source is a part of Income Tax. Talking about the announcement of the government, you will have to pay TDS of 1 percent on the transaction of any kind of cryptocurrency. Understand in simple language, if you have done a transaction of cryptocurrency of one lakh rupees, then one percent of this transaction will be deducted as TDS from your account. By deducting TDS, the government will get a complete account of the cryptocurrency transactions done from your account. This means in a way, TDS is levied to keep an eye on the transactions of cryptocurrencies.

 

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