According to Nithin Kamath, founder and CEO of Brokerage Giant Zerodha, Indian crypto trading platform has witnessed a surge in derivative activities. Kamath noted that this trend continues despite the unclear atmosphere of regulation within the sector, which most financial analysts consider to be a “gray zone.”
Indian investors are increasingly interested in crypto
New reports reveal that wealthy individuals and businesses in India are showing great interest in cryptocurrency investment. Record-breaking digital asset prices, ease of access to trading platforms, and rules for support in key markets are linked to growing interest in derivative trading.
In particular, asset managers across India have shown growing interest in Bitcoin, funds, exchange-selling products and advanced trading strategies. This trend reflects that in many ways, cryptocurrencies have become an important part of the portfolio of most investors in India. Unlike in recent years, Crypto made up a small slice of investment.
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Despite the existing complexity and high levels of uncertainty within the sector, Kamath believes that the extra appeal for most investors to digital assets futures and options is the high leverage and lower tax rates associated with these products compared to traditional markets.
Regulation adjustments for SEBI MULLS Equity Derivatives
In the meantime, the Securities and Exchange Commission of India (SEBI) plans to extend the tenure of equity derivatives, aiming to curb gray market risks. According to Sebi Chief Tuhin Kanta Pandey, the board will consult with stakeholders on ways to improve maturity in derivative products suitable for hedging and long-term investments.
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Meanwhile, despite the lack of regulatory clarity in India’s digital assets sector, the regulators have enacted tax rules that guide crypto transactions in the region. For example, crypto traders are liable to pay 30% tax on profits from trading, selling or spending cryptocurrency. You will also need to pay an additional 1% TDS. This applies to the sale of crypto assets exceeding Rs 50,000 within a single fiscal year.
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