In a bid to promote tax compliance among Indian crypto investors, TaxNodes has launched an innovative initiative that provides complimentary NFTs to taxpayers who utilize its platform. The collaboration between the tax computation platform and Polygon Labs aims to encourage crypto taxpayers and drive the adoption of digital assets in India, where the crypto community is expected to surpass 156 million users by the end of 2023.
Eligible users can claim their NFTs, which are minted on the Polygon Labs blockchain, by providing their Income Tax Return (ITR) acknowledgement number before July 31. Additionally, users will receive an immediate 25 percent discount on their ITR filing for the 2022-2023 fiscal year when utilizing the TaxNodes platform. This initiative comes as India grapples with the challenge of regulating cryptocurrencies, which lack a specific rulebook, by imposing taxes on crypto profits to monitor transactions and address concerns such as money laundering and terror financing.
India’s decision to levy a 30 percent tax on crypto incomes, coupled with a one percent Tax Deducted at Source (TDS) on each crypto transaction, drew mixed reactions from the crypto community. While the taxation framework marked the official recognition of cryptocurrencies within India’s financial ecosystem, the broad tax bracket faced criticism for its wide range. Consequently, many crypto holders in India, unsure of their tax obligations, failed to file their crypto taxes last year. A recent report by Divly, a Sweden-based tech research firm, revealed that only 0.07 percent of crypto holders in India paid their taxes in the previous year.
By offering NFTs as incentives for complying with crypto tax obligations, TaxNodes hopes to encourage more individuals to declare their crypto holdings and enhance overall tax compliance. The effectiveness of this approach will become clearer with time and participation.
Avinash Shekhar, CEO and Founder of TaxNodes, expressed the company’s intention behind the initiative, stating, “Our goal is not only to express gratitude to users for entrusting us with their IT computation but also to encourage their participation in the broader Web3 ecosystem by integrating NFTs on the Polygon blockchain. This initiative allows users to experience the value of NFTs firsthand and discover how they can leverage these tokens for various benefits and discounts on our platform.”
TaxNodes has already formed partnerships with leading Indian crypto exchanges, ZebPay and WazirX, to assist their users in computing their crypto taxes accurately and efficiently.
