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Tax, bear market temper India’s enthusiasm for NFTs

Sejal Dagli attended an online class last November, Non-fungible token (NFT).. Inspired by the enthusiasm to learn about new technologies, a 35-year-old yoga teacher in India created his own NFT to better understand the process.

In January, when his son Vivaan wanted to create a 3D image of an elephant listening to music as part of a school project that reflected a pandemic life, Dagli suggested turning it into an NFT. ..

The 10-year-old courageously participated in the project with the help of his mother and finally posted it on OpenSea.

“he [Vivaan] He’s more interested in technology, so he’s interested in NFTs, “Dagli said. Forkast.. “And of course he’s also creative,” she said... “So I want [him] To put both of them [talents] Create your own identity together. ”

Vivaan Dagli’s first NFT

The passion of the mother and son duo reflects the widespread trend of growing interest in NFTs in a country that is still uniquely positioned as the most promising market in the early industry.

India is the home of the world Largest population of young peopleThe second most in the world valuable Sports facilities for each game, movie industry Produces the most numbers As evidenced by one of the world’s movies, the music industry is as valuable as movies around the world Most popular YouTube channel.

India ranks first in the adoption of NFT games and states that just over one-third of the country’s respondents are involved in NFT games. according to To the March online survey by Finder.com. Another 11% said they plan to play this year.

This survey surveyed Internet users in 26 countries. The sample size is in direct proportion to the population and ranges from 1,000 to 3,800 people per country.

Atulya Bhat of BuyUcoin.com said interest was driven by profit motives. Forkast.. Co-founder and Chief Marketing Officer (CMO) of iBlock Technologies Pvt said: Ltd., which operates an Indian cryptocurrency exchange on its own NFT marketplace.

This is when the NFT market is sluggish.

NFT sales tracked by CryptoSlam Average selling prices in May fell from $ 598.53 to $ 494.53, down from $ 3.72 billion in April to $ 3.07 billion. In 10 days, NFT sales reached US $ 594.28 million in June, with an average price dropping to US $ 185.70.

See related article: Bumper April helps NFTs get out of the bear market territory

Nevertheless, Daglis continues to believe in the future potential of NFTs. “Previously, NFTs focused primarily on art, but as their usefulness increases, NFTs have a greater potential for growth,” she said.

Then there’s a small section of NFT traders trying to support their favorite artists and celebrities. This is a segment that has the potential to invigorate the industry.

“NFTs have attracted many new audiences to the crypto space, not just crypto investors,” Bhat said. “People who are loyal to real fans and artists, and who are interested in buying and maintaining these assets in digital form,” he added. “We have seen a lot of interest in it.”

Fan firepower

Its firepower was revealed when the NFT associated with Boliwood superstar Amitabh Bachchan was launched in November 2021.

Over 6 million bidders Reportedly I tried to buy the 5,000 NFTs offered, but the collection sold out for about US $ 1 million in an hour. Over 65% of bidders were from India.

Screenshot 20220620 at 15.29.15
Amitabh Bachchan’s NFT Collection

NFTs for sale on the BeyondLife.club marketplace include the Madhushala collection, sonnet actor narration by poet father Harivan Schlaibachchan, and vintage actor posters featuring seven signed posters. Was included.

See related article: Boliwood megastar Amitabh Bachchan announces his own NFT collection

Ramkumar Subramaniam, co-founder and CEO of The Guardian Blockchain Labs Pte, “created a market in India” with the launch of the Bachchan NFT.Co., Ltd. said Forkast.. Based in Singapore, the company operates GuardianLink.io in partnership with Rhiti Entertainment Pvt. Co., Ltd. launches NFT.

In a country with a population of over 1.4 billion, Indian celebrities are on the cusp of NFT to monetize millions of followers.

Indian film actors Salman Khan, Rajinikanth, Kamal Haasan, Sunny Leone, and cricketers Sunil Gavaskar and Yuvraj Singh are among the celebrities who have followed in the footsteps of Batchan. Launch your own NFT collection..

According to Subramaniam, about 70% of GuardianLink’s approximately 100,000 active NFT traders are from India. He said the market has sold about 85,000 NFTs in primary sales since 2020, with an average of over 300 NFTs traded in secondary sales per day.

BuyUcoin.com, which launched the NFT Marketplace last May, has promoted about 7,100 NFT transactions and employs more than 2,400 NFT creators, Bhat said.

Where there is money

But wherever there is money, there are Indian tax officers.

Bachchan had to do Reportedly Authorities will pay approximately US $ 130,000 (approximately Rs. 10 million) for the levy after sending a tax evasion notice to investors trading cryptocurrencies and NFTs.

Assets It contains Definition of Virtual Digital Assets (VDA) when Indian Finance Minister Nirmala Sitharaman amends the Income Tax Act and puts it under the jurisdiction of the national tax department. A 30% tax on profits earned from crypto trading will come into effect in April and an additional 1% factory product tax will begin in July.

See related article: Indian tax Boogeyman scares young crypto investors

Both Bhat and Subramaniam acknowledged that taxes, coupled with the bear crypto market, have reduced interest in NFTs.

Taxes “influenced” [NFT interest] in the same way [as crypto] — There is no (tax) clarity, ”Bhat said.

Bhat explained that it is not clear how NFT profits will be taxed in the case of multiple transactions. For example, if the author loses on one NFT, can he offset the profits gained on the other NFTs, Bhat asked.

Indeed, the revised tax law does not allow you to offset losses on the profits you earn from virtual assets, unlike other asset classes such as stocks and real estate.

Was it caught in a bud?

Kaparthi Jonnalagadda said the tax has weakened the enthusiasm of some who have begun to explore the prospects for NFT transactions. Forkast.

“People with limited budgets who wanted to try NFTs couldn’t because of taxes,” said Jonnalagadda.

Not even NFT artists remain intact.

An Australian-based Indian NFT creator said, “Many creators were scared and most wanted to actually increase sales by April 1st,” because the tax system wasn’t clear. I’m talking. Forkast..

“It’s a flat-rate tax that isn’t based on income levels, so I think it’s a bit unfair for small-scale creators who are actually trying to make a living from it,” said the operator Twitter Handle. Cryptog0d.nft Said.

Some creators had to raise the price of NFTs by 30% in consideration of taxes, said one of the top NFT creators on the market operated by Indian cryptocurrency exchange WazirX.com. Forkast..

Higher prices are moist as the wheat is separated from the rice husks.

“Good NFTs and important NFTs that people value are persistent,” says Subramaniam. Forkast..

It’s getting harder and harder to profit from NFTs, and most traders who use automated bots can make a profit, Jonnalagadda said.

Two years before the market started, “everything you touch turns into gold,” he said, but profiting from NFT trading after tax is “no longer easy.”

India could become one of the world’s largest markets for NFTs thanks to it Demographic dividend, High internet penetrationWhen High digital adoptionEspecially in the Covid-19 pandemic, said Subramaniam.

According to “Digital Adoption: Is COVID-19 a Catalyst of Permanent Change?”, India has the highest adoption rate of digital technology in health and welfare services as pandemics have accelerated the spread of such means. It was one of the countries. Investigation By EY and the Institute for Global Health Innovation in Imperial College London.

“Looking at it, we are the biggest adopters of the app economy,” said Subramaniam. “So I definitely look the same [happening] With Web3.0, “he said. “NFTs aren’t too late because we’re probably the third largest player in cryptocurrency trading.”

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