Large and small, young and old investors have started investing in cryptocurrencies and other VDAs. This was because the space was unregulated, and the profits were huge. Investing here was extremely risky, but it provided unprecedented returns that have attracted most New Age investors. As a plus, it was completely tax-free. However, by placing the VDA under Indian taxation, the government taxed cryptocurrency earnings higher than equity investments without providing any benefit. The government is trying to curb speculative transactions in this area. It can be said that the appeal of unconventional and highly profitable cryptocurrencies has been lost.
Why are new taxes discouraging crypto enthusiasts?
The Indian government is telling the crypto lobby that 30% of that cut will automatically be deducted as tax when you make a profit on the token. Furthermore, even if you lose on one token and make a profit on another, resulting in an overall loss, you still have to pay the government a 30% tax on your viable assets. There is no set-off for a loss. In addition, a 1% tax is withheld. Investors should treat each virtual asset as a separate entity for tax purposes. Not very encouraging.
My crypto journey
Recently, I suffered a big loss in cryptocurrency. You invested more than you lost, violating Rule #1 of Cryptocurrency Trading. Winning or losing trade is determined by both the market and personal emotions. I lost money through both greed and fear. But it was a learning experience, balancing greed and fear while also making me feel more emotionally stable. I initially invested 30,000 rupees in the crypto market. Everything started to go well, and I received a profit of 10,000 rupees in 15 days. Then I took out his 20,000 rupee loan and invested in cryptocurrency. Then, a month later, the cryptocurrency tax credit law was introduced, and the market began to collapse. It’s a painful experience, especially if you’ve invested more than you can afford to lose.
Moreover, seeing big wins turn into big losses has a deep psychological effect. Here, I panicked. After going through the crazy ups and downs of the cryptocurrency world, I am stronger, smarter, and more experienced (at controlling my emotions). I have a tip for novice investors.
- Don’t panic. Don’t be greedy.
- Don’t go looking for the next Bitcoin. Being deceived by someone who tries to project himself as someone other than who he is.
- Look at the fundamentals of the coin you want to invest in. Dive in after careful consideration and research, but not all at once. Participate regardless of whether you buy or sell.