Indian government has put fresh crypto tax penalties which also enlists TDS. The move has made the crypto community pretty upset. At no point in her budget speech did the Finance Minister NIrmala Sitharaman mention the word crypto, this year. Fintech news updates in India.
Crypto Tax In India Goes Without Bend: Fintech news updates in India.
Nirmala Sitharaman read out the budget clauses with hearts around kept pounding out of apprehensions. A day before the budget, she referred to this year’s “Economic Survey” which harped upon “a common approach” to regulating the crypto ecosystem”. Fintech news updates in India.
As was expected, the union budget invited many concerns from the crypto icons in the country. Fintech news updates in India.
Neeraj Khandelwal, who is co-founder of popular crypto exchange Coindcx, opened up his twitter account to share, “No changes to crypto taxation in India in the Budget Session. It stands at 1% TDS and 30% on profits. This puts India at a web3 disadvantage for another year.”
In the similar spirit of apparent resentment, Sathvik Vishwanath, CEO of crypto exchange Unocoin, reacted, ““There was no mention of crypto or blockchain in Budget this time. It has been a year since the announcement of 1% TDS was done and we all thought it would affect the industry. It did! Now we need reviving amendments.”
From Wazirx, Mr Rajagopal Menon, as Vice President, reported, ““The Indian Union Budget 2023 made no changes to existing crypto taxes, leaving Indian crypto companies on the Stairway to Heaven. There is lingering uncertainty because of high taxes and a lack of a solid regulatory framework which are stifling progress in the industry.”
India Government Piles Up Crypto Tax Penalties: Fintech news updates in India.
Albeit, the finance minister skipped the word crypto anywhere in her budget address, the Finance Bill did indicate an alteration to the Income Tax Act as is applicable to TDS. Fintech news updates in India.
On Twitter again, Koinx, a prominent firm for crypto tax, unraveled that the penalty for failing to pay crypto TDS refers to the sum which is equal to the TDS that is not paid which a joint commissioner will impose and that for late payment, a 15% interest per annum will be imposed.
India Today indicates that if one skips payment of TDS on crypto-centric deals, then he can be imprisoned for upto 7 years. Fintech news updates in India.
Ashish Singhal, CEO of CoinSwitch switched to Twitter to unlock details, “The TDS of 1% for crypto transactions remains as it is. But there is a clarification. The onus of deducting TDS has been on crypto exchanges or on the user (if using P2P or other means), but until now, there was no penalty for non-deduction.
Overall scenario, in India, dear reader, is that crypto based trading volumes reflect a decline in the last one year. Fintech news updates in India.
This is largely due to the gloomy uncertainty as the regulatory system is not there and our central bank adheres to ban on crypto currency. Fintech news updates in India.
As a result, crypto traders and investors prefer to stay away. Fintech news updates in India.
MSMEs Rush For Credit And Finance: Fintech news updates in India.
In India’s MSME sector, the credit gap translates to a huge amount (around 25.8 trillion INR as IFC lays out. No surprises, such is a considerable need and across India, there are 63.3 million MSMEs as are listed while 15% of these are able to access the credit formally from financial bodies accredited for the purpose.
Such a grim scenario can be transformed if we allow the mechanism of credit availability to undergo swift change in this sector. Fintech news updates in India.
SIDBI-CIBIL Pulse report also indicates a surge in credit demand from MSMEs, since the Covid times. Fintech news updates in India.
For the MSME sector, the tech market lending capacity hovers somewhere between $80 to $100 billion in the upcoming financial year. Fintech news updates in India.
Now in order to approach the MSME sector deep into the core, there are some troubled areas, needing our immediate focus, especially from digital lending start-ups. The weak areas can be fragile transparency, lengthy processing time, big amounts of paperwork and big investment and operational cost. Fintech news updates in India.
Challenges Give Space To Opportunity: Fintech news updates in India.
For those who script policy and also for the private sector, such is the prime time to promote superior banking services, higher deposit rates and to ensure wider capital accessibility as the succour to MSMEs. Fintech news updates in India.
Fintech companies and available tech frameworks, set the trends in the field. We have banks, NBFCs and even certain schemes floated by the government, but these value only the SMEs with strong and established creditworthiness.
Now here, fintech reflects a great promise and validity to change the whole game of lending and can leave an impact at the lower level too. Fintech news updates in India to stay ahead in the competition. Fintech news updates in India.
Digital Payments Are Fuel Of Indian Fintech: Fintech news updates in India.
India witnessed UPI in 2016 and till now, there have been 375 payment start-ups across India. Fintech news updates in India.
In 2020, online transactions rose incredibly in India, in fact, around 80% more than the preceding years. Fintech news updates in India.
As of now, India’s digital payment market is about 2.27% of the world and its value would touch $12.4 trillion in the coming two years. Fintech news updates in India.
Splash Of Technology In Payment Churning: Fintech news updates in India.
Tech evolution has had a deep impact in the financial landscape and no doubt about it, as we see payments, lending and banking getting spoilt by deep tech penetration. Fintech news updates in India.
The term fintech itself reflects a distinct definition every time we consider it and its scope is broadened to include investment management, education and even retail now. Fintech news updates in India.
MSME DIstribution In India: Fintech news updates in India.
It is estimated that about 60 million MSMEs are scattered across the country while 95% of these units happen to be micro business establishments and most of these deck-up the rural areas and have devoted themselves to the service sector.
Such are sans any declared asset ownership, lack formal documentation and are cash-centric. Fintech news updates in India.
In addition to this, the MSMEs confront challenges which are specific to geographies and local cultures while products and markets are also critical factors. Fintech news updates in India.
Therefore, one fintech product or service would not be a possible solution in this scenario as need is whimsical. Fintech news updates in India.
Fintech Can Re-Structure The System: Fintech news updates in India.
For MSMEs, fintech can redesign the whole framework when it comes to lending and finance. It can help assess risk and can analyse creditworthiness. Fintech news updates in India.
Commonly, within the risk management framework, we check for asset ownership, CIBIL scores, supported documentation which is not absolute with the MSMEs of the unorganized sector. Fintech news updates in India.
Fintech can unroll a model which is cash-centric and the creditworthiness of MSMEs will be determined, on the basis of cash-flows occurred through digital mode of payments. Fintech news updates in India.
Challenger Banks: Fintech news updates in India.
Financial system has seen the entry of new type of banks in recent times which are referred to as “challenger banks” as these are set to test the complex finance ecosystem and client winning process which conventional banks adhere to. Fintech news updates in India.
Such are finance agencies which extend loans on lower interest rates and also take advantage of premium technology and AI to provide personalized services to those looking for these.
Further, these institutions are able to bring down the operating costs. Fintech news updates in India.
Such banks are gaining ground in India and people are happy with their service graph. Fintech news updates in India.
Accounts Aggregators In The Fintech Curve: Fintech news updates in India.
This is a framework that helps in sharing financial data in quick time and such data flow happens in an encrypted format between the standard entities which can be the banks and NBFCs. Fintech news updates in India.
Such is the framework that is responsible for swift data flow between providers of financial info (FIPs) and the users of financial info (FIUs) and as a result of this, banks are able to access data flow that is completely verified and thus is verified.
Such a set-up is widely preferred by the banks as costs are controlled and this allows them to unroll specific products and services. Fintech news updates in India.
Furthermore, with fintech, we manage comprehensive connectivity and can seek a banking system which is more devoted. Fintech news updates in India.
In fact, banks forge strong alliances with fintech agencies to unroll first and last mile services to MSMEs. Fintech news updates in India.
Now, banks and NBFCs are able to make a vast reach into rural areas and any MSME party can easily get finance from anywhere in India. Fintech news updates in India.
Co-lending partners are there to provide loans and online and offline lenders can check vast amounts of data (structured and unstructured) as they go out to estimate the risk and such a pattern is a boon to MSMEs as loan approvals are quicker. Fintech news updates in India.
Well, dear reader, fintech is dynamic enough to rustle out new models and to bring more players within the credit bubble and this lowers the cost and risk of lending practice. Fintech news updates in India.
Such is a tremendous boost to MSMEs present in the country. Fintech news updates in India.
