"18% Crypto Tax Imposed in India: Implications for Shiba Inu Investors"
India Imposes Heavy Taxation on Crypto Services, Affecting Shiba Inu Ecosystem
India has introduced a comprehensive taxation framework for cryptocurrency services, which could have significant implications for the Shiba Inu (SHIB) ecosystem. The new tax regime includes an 18% Goods and Services Tax (GST) on platform service fees, a 30% flat tax on cryptocurrency gains, and a 1% Tax Deducted at Source (TDS) on transactions [1][2].
The 18% GST will be applied to a variety of services, including spot and margin trading, derivatives, fiat transactions, and crypto withdrawals. It will also cover conversion activities within Unified Trading Accounts, such as auto-repayments and liquidations [1][2].
The combined effect of these taxes significantly raises the cost of trading and using SHIB in India. The extra GST increases transaction fees, while the high income tax rate on gains reduces net profits [1][2].
The long-term implications for Shiba Inu (SHIB) and similar cryptocurrencies include reduced trading volume and liquidity, increased cost of participation, compliance challenges, and market sentiment changes [3][4][5].
Reduced trading volume and liquidity: The additional 18% GST on platform fees discourages frequent transactions, potentially lowering SHIB’s market activity in India [1][2].
Increased cost of participation: Investors and users face higher overall costs when buying, selling, or staking SHIB, which could limit adoption and uptake in one of the world's largest crypto markets.
Compliance challenges and scrutiny: Authorities have intensified scrutiny, sending over 44,000 notices for suspected tax evasion. The use of advanced surveillance, such as Project Insight and Non-Filer Monitoring System (NMS), means investors must maintain meticulous records and full compliance, adding friction for users within the SHIB ecosystem [3][4][5].
No offset for losses: The 30% tax applies only on profits without allowing loss compensations, limiting tax efficiency for SHIB traders and investors [1][2].
Market sentiment and innovation: The strict rules may deter developers and innovators from launching SHIB-related projects or DeFi services locally due to higher costs and regulatory risks.
Bybit Fintech Limited has started applying the 18% GST on its crypto services for Indian users. Effective July 9, several services will no longer be available to Indian users on Bybit's platform, including legacy crypto loans, the Bybit Card, and a range of trading bots [6].
The new taxation may lead to a shift in how Indian users engage with meme tokens and other altcoins. As of a December 2024 report, Shiba Inu (SHIB) was the most-traded crypto in India [7]. By February and March 2025, SHIB was the #1 most held cryptocurrency in India, according to social media chatter [8].
Despite the challenges, the taxation framework pushes SHIB holders and platforms toward strict transparency and formalization within India’s financial norms [1][2][3][5].
[1] India's Crypto Tax: A Comprehensive Guide
[2] India's Crypto Tax: What You Need to Know
[3] India's Crypto Tax: How It Affects Investors
[4] India's Crypto Tax: What's Changed and What's Next
[5] India's Crypto Tax: The Impact on Users and the Industry
[6] Bybit Imposes 18% GST on Crypto Services for Indian Users
[7] Shiba Inu Is the Most-Traded Crypto in India, Report Says
[8] Shiba Inu Tops as Most-Held Crypto in India, Social Media Chatter Shows
This article is generated by an AI model and is not a human-authored article.
- With the 18% GST on crypto services, there might be a shift in India's crypto investors' preference from Shiba Inu (SHIB) to other tokens that offer lower transaction costs, as the high taxation could impact their profitability and return on investment.
- Regulation in the form of a 30% flat tax on cryptocurrency gains could prompt Shiba Inu (SHIB) investors to explore opportunities in financial instruments or investments that are not subject to such a high tax rate, like conventional investments in equities, mutual funds, or magazine subscriptions.
