Crypto tax firm CoinTracker on May 25 announced its foray into the India market with an official product launch. The company's entry comes at a time when the crypto industry is grappling with 30 percent tax on virtual assets and additionally will start paying 1 percent TDS, starting July 1.
The firm said that starting Wednesday, its tax compliance and portfolio tracking products will be available to all crypto users across the country. While the base product will be free, its other products will be charged Rs 699 and Rs 2,499 a year. It also has an 'unlimited' offering but the price differs individually. These offerings can be used for both centralised and decentralised exchanges.
“It can be challenging for folks to navigate the complexity of buying, holding and transacting with cryptocurrency and nearly impossible to comply with taxes without the right tool. We built CoinTracker to solve this problem seamlessly and are excited to deliver our offering in India. We plan to rapidly expand our integrations and partnerships with all the popular exchanges and tax products used in India in the coming months, and ultimately work together to help enable mainstream adoption of cryptocurrency in India,” said Jon Lerner, CEO of CoinTracker.
Commenting on the dropping trading volumes and the uncertainty of the crypto regulations in India, Lerner said, “Coin tracker enables users to comply with taxes, we're not dependent on users to have to transact a lot and drive transaction volume.”
“And it may be that as crypto goes through this sort of negative adoption wave right now, there will be slightly lower demand. But we take a long term view on this, as markets inevitably, go back to a positive cycle, people will begin to transact more again. And taxes and portfolio tracking, again, becomes something that's at the top of the mind for users.”
“In this timeframe, we get cointracker into hands of users in India, we get to improve the product, iterate, and be ready for whatever happens,” he added.
Adding to this, Shehan Chandrasekera, Head of Tax Strategy, CoinTracker, said, “I don't find that 30% flat tax rate to be necessarily very strict. Because if you, if you take a look at the US, if there's a short term capital gain tax, it could be as high as 37% or 50%, if you consider the federal taxes in the state of Texas, so converted that, 30% flat tax rate is somewhat reasonable.
“But, the taxpayers not being able to offset their losses, again, their gains, a little bit to a stringent side. And probably that's something that the Indian government can improve on as they are looking into this space.”
The firm currently has 65 employees globally and plans to quadruple it in the next 12 months.
Earlier this year, the firm raised $100 million at a valuation of $1.3 billion. The funding round was led by venture capital firm Accel with investors such as Initialized Capital, General Catalyst, Y Combinator Accuity, and Seven Seven Six, the venture firm of Reddit co-founder Alexis Ohanian participating in the round.
Meanwhile, the crypto market has been facing a downturn cycle globally. Between November 2021 and now, Bitcoin’s price fell by 47 percent. Ethereum’s by 48 percent. Luna (another crypto coin) lost almost its entire value; its price fell by nearly 100 percent (from Rs 3,535 to nearly zero) in this period of time. But Indian investors and exchanges have challenges of their own. Since the 30 percent tax came into effect on April 1, exchanges have already lost a lot of volumes.