news4global
  • Home
  • Bitcoin
  • Blockchain
  • Business
  • Latest news
  • Market
  • Regulation
  • VideosHot
    Emergency – 100X Crypto coin just abi – jaldi karo #bitcoin #cryptocurrency

    Emergency – 100X Crypto coin just abi – jaldi karo #bitcoin #cryptocurrency

    FTM Fantom Crypto Price News Today – Elliott Wave Technical Analysis Update and Price Now!

    FTM Fantom Crypto Price News Today – Elliott Wave Technical Analysis Update and Price Now!

    BREAKING: COINBASE AND BLACKROCK ARE SENDING PEPE COIN TO $0.01 – EXPLAINED – PEPE COIN NEWS TODAY

    BREAKING: COINBASE AND BLACKROCK ARE SENDING PEPE COIN TO $0.01 – EXPLAINED – PEPE COIN NEWS TODAY

    Polkadot DOT Price News Today – Technical Analysis Update Now, Price Now! Elliott Wave Analysis!

    Polkadot DOT Price News Today – Technical Analysis Update Now, Price Now! Elliott Wave Analysis!

    The Market On The Edge: Gareth Soloway's Shocking Revelation

    The Market On The Edge: Gareth Soloway's Shocking Revelation

    What Is a Trading Strategy || Guide to Cryptocurrency Trading Strategy for Beginners

    What Is a Trading Strategy || Guide to Cryptocurrency Trading Strategy for Beginners

    Polygon MATIC Price News Today – Elliott Wave Technical Analysis Update, This is Happening Now!

    Polygon MATIC Price News Today – Elliott Wave Technical Analysis Update, This is Happening Now!

    Injective Protocol INJ Coin Price News Today – Elliott Wave Technical Analysis and Price Prediction!

    Injective Protocol INJ Coin Price News Today – Elliott Wave Technical Analysis and Price Prediction!

    Cardano ADA Price News Today – Elliott Wave Technical Analysis and Price Now! Price Prediction!

    Cardano ADA Price News Today – Elliott Wave Technical Analysis and Price Now! Price Prediction!

No Result
View All Result
  • Home
  • Bitcoin
  • Blockchain
  • Business
  • Latest news
  • Market
  • Regulation
  • VideosHot
    Emergency – 100X Crypto coin just abi – jaldi karo #bitcoin #cryptocurrency

    Emergency – 100X Crypto coin just abi – jaldi karo #bitcoin #cryptocurrency

    FTM Fantom Crypto Price News Today – Elliott Wave Technical Analysis Update and Price Now!

    FTM Fantom Crypto Price News Today – Elliott Wave Technical Analysis Update and Price Now!

    BREAKING: COINBASE AND BLACKROCK ARE SENDING PEPE COIN TO $0.01 – EXPLAINED – PEPE COIN NEWS TODAY

    BREAKING: COINBASE AND BLACKROCK ARE SENDING PEPE COIN TO $0.01 – EXPLAINED – PEPE COIN NEWS TODAY

    Polkadot DOT Price News Today – Technical Analysis Update Now, Price Now! Elliott Wave Analysis!

    Polkadot DOT Price News Today – Technical Analysis Update Now, Price Now! Elliott Wave Analysis!

    The Market On The Edge: Gareth Soloway's Shocking Revelation

    The Market On The Edge: Gareth Soloway's Shocking Revelation

    What Is a Trading Strategy || Guide to Cryptocurrency Trading Strategy for Beginners

    What Is a Trading Strategy || Guide to Cryptocurrency Trading Strategy for Beginners

    Polygon MATIC Price News Today – Elliott Wave Technical Analysis Update, This is Happening Now!

    Polygon MATIC Price News Today – Elliott Wave Technical Analysis Update, This is Happening Now!

    Injective Protocol INJ Coin Price News Today – Elliott Wave Technical Analysis and Price Prediction!

    Injective Protocol INJ Coin Price News Today – Elliott Wave Technical Analysis and Price Prediction!

    Cardano ADA Price News Today – Elliott Wave Technical Analysis and Price Now! Price Prediction!

    Cardano ADA Price News Today – Elliott Wave Technical Analysis and Price Now! Price Prediction!

No Result
View All Result
news4global
No Result
View All Result
Home Bitcoin

What the Hard Fork? All You Need to Know About Tax Implications of ETH Merge

September 2, 2022
Reading Time: 3 mins read
0
Beyond the Hype, What Does the Blockchain’s ‘Proof of Work’ to ‘Proof of Stake’ Shift Mean
189
SHARES
1.5k
VIEWS
Share on FacebookShare on Twitter

Related articles

Bitcoin pro traders warm up the $24K level, suggesting that the current BTC rally has legs – Cointelegraph

XRP Price and Network Activity Skyrocket 2,600% as Hinman … – Crypto News Flash

May 31, 2023
Bitcoin pro traders warm up the $24K level, suggesting that the current BTC rally has legs – Cointelegraph

Wall Street gives crypto a chance – Financial Times

May 31, 2023

The crypto-verse is all set for the much-anticipated Ethereum merge, which will begin on September 6. Building up to the merge, ETH prices, currently at $1,631.43, have also been steadily rising by about 4% over the past 24 hours.

It is a mega event, given that even a small glitch could adversely impact about $64.8 billion worth of value locked in the popular blockchain, not to mention its reputation. But among all this, is there anything that investors need to prepare for?

CONTENTIONS OF A HARD FORK

In case everything goes according to the book, investors need not fear the taxmen. However, they enter the picture only in case ETH goes through a hard fork. Essentially, this involves splitting one cryptocurrency into two distinctive ones. Think ETH and ETH Classic, 2016.

This usually happens when members of the concerned crypto community (ETH, in this case) want to disassociate with the current blockchain. This could be due to many reasons — the chain’s shortcomings, speed, or inadequate functionalities.

When this happens, investors of the original blockchain receive tokens from the new chain as well. However, miners have to take a call as to which blockchain would they continue operating on. Now, ETH is completely shifting to a proof-of-stake (PoS) model, which will consume 99.95% less energy.

This has left proof of work (PoW) miners disgruntled, given that they are heavily invested in the infrastructure needed to run the energy-devouring PoW mechanism. Then there’s the case of their rewards being scaled back significantly.

The PoW chain used to pay about 13,000 ETH to these miners on a daily basis. Once ETH migrates to PoS, the validator payout will fall by 88% to 1,600 ETH daily.

Explained Edul Patel, CEO and Co-Founder, Mudrex, A Global Crypto Investment Platform, “Previously, miners were verifying the transaction process in PoW. Now, miners need to adopt the PoS change. If that happens without any issue with validators taking over, there would not be any tax as tokens of PoS will be considered the same assets as that of PoW.”

What about regular investors?

Is there anything regular investors should look out for?

In the event of a hard fork, ETH investors will be airdropped tokens from the newly forked chain, too. This will subject them to a 30% tax on their value, as per India’s present crypto legislation.

However, Archit Gupta, Founder & CEO, ClearTax, highlighted that there is nothing to worry about. Most DeFi projects on the chain support the merge. And that potentially translates to massive support, since 80% of all decentralized applications in the ecosystem are based on the ethereum blockchain.

“If you own some ETH, be it in a wallet or an exchange, you don’t need to do anything. The transition involves certain risks. However, if all goes well, the transition will just happen, and ETH will continue to function as before, without any downtime.”

“The transition will not impact the investors holding ETH, whether the Ether price moves upward or downward. As per the income tax rules, the tax event would occur only when there is a transfer of cryptocurrency. The merge will only upgrade the Ethereum platform, and there will be no change in the investor’s ETH ownership,” he continued.

Shashi Mathews, Partner, IndusLaw, concurred. “Given that the merge is not resulting in the issuance of any new crypto coins to users, it is unlikely that there will be any tax implications on account of this event, in the hands of the users. That said, all major exchanges have been preparing for this once-in-a-lifetime event in the cryptosphere. The system itself has been subject to various tests and delays to ensure no blockage of funds or any disruptions in the blockchain. However, users should be wary of any offers to increase their funds or double their ETH during this period.”

However, Raghav Kumar Bajaj, Counsel, Khaitan & Co, feels that investors should be wary of the VDA provisions here, in case a hard-fork happens. “The much awaited ETH Merge will be important for investors from an income-tax perspective also. The primary considerations to be examined in this regard would be whether this event will fall within the ambit of a ‘transfer’ for the purpose of Indian Income-tax law and whether it will result in the receipt of a new token by the investors or not,” he signs off.

Read the Latest News and Breaking News here

Tags: Cryptocurrencyethereumhard forkinvestors
Share76Tweet47

Related Posts

Bitcoin pro traders warm up the $24K level, suggesting that the current BTC rally has legs – Cointelegraph

XRP Price and Network Activity Skyrocket 2,600% as Hinman … – Crypto News Flash

by admin
May 31, 2023
0

XRP Price and Network Activity Skyrocket 2,600% as Hinman ...  Crypto News Flash

Bitcoin pro traders warm up the $24K level, suggesting that the current BTC rally has legs – Cointelegraph

Wall Street gives crypto a chance – Financial Times

by admin
May 31, 2023
0

Wall Street gives crypto a chance  Financial Times

Bitcoin pro traders warm up the $24K level, suggesting that the current BTC rally has legs – Cointelegraph

What the 'anti-mining bill' means for the crypto industry in Texas – Cointelegraph

by admin
May 30, 2023
0

What the 'anti-mining bill' means for the crypto industry in Texas  Cointelegraph

Bitcoin pro traders warm up the $24K level, suggesting that the current BTC rally has legs – Cointelegraph

U.S. congressman says crypto mining tax scrapped in debt ceiling deal – Forkast News

by admin
May 30, 2023
0

U.S. congressman says crypto mining tax scrapped in debt ceiling deal  Forkast News

Bitcoin pro traders warm up the $24K level, suggesting that the current BTC rally has legs – Cointelegraph

Hong Kong Web3 industry forms new associations – Forkast News

by admin
May 29, 2023
0

Hong Kong Web3 industry forms new associations  Forkast News

Load More
  • Trending
  • Comments
  • Latest

Bitcoin Is ‘Definitely Not a Fraud,’ CEO of Mobile-Only Bank Revolut Says

March 2, 2022

Bitcoin’s Main Rival Ethereum Hits A Fresh Record High: $425.55

March 3, 2022
How online shopping has changed over the last 30 years | National

How online shopping has changed over the last 30 years | National

April 6, 2022
Protocon Announces ‘Contract Model’, an Alternative

Protocon Announces ‘Contract Model’, an Alternative

April 6, 2022

US Commodities Regulator Beefs Up Bitcoin Futures Review

0

Bitcoin Hits 2018 Low as Concerns Mount on Regulation, Viability

0

India: Bitcoin Prices Drop As Media Misinterprets Gov’s Regulation Speech

0

Bitcoin’s Main Rival Ethereum Hits A Fresh Record High: $425.55

0
ESSPOMNCE Wireless Earbuds, Bluetooth Earbuds, Earphones Wireless Bluetooth with Charging case, Ear Bud & in-Ear Headphones IPX6 Waterproof, Wireless Ear Buds with Mic Auto Pairing for Android iPhone

ESSPOMNCE Wireless Earbuds, Bluetooth Earbuds, Earphones Wireless Bluetooth with Charging case, Ear Bud & in-Ear Headphones IPX6 Waterproof, Wireless Ear Buds with Mic Auto Pairing for Android iPhone

June 1, 2023
Ukraine war: 'Children die' in new missile attack on Kyiv

Ukraine war: 'Children die' in new missile attack on Kyiv

June 1, 2023
Russia Strikes Kyiv, Killing 3 in Another Early Morning Attack

Russia Strikes Kyiv, Killing 3 in Another Early Morning Attack

June 1, 2023
BlueFire Stereo Gaming Headset for Playstation 4 PS4 PS5, Over-Ear Headphones with Mic and LED Lights for Xbox One, PC, Laptop (Red)

BlueFire Stereo Gaming Headset for Playstation 4 PS4 PS5, Over-Ear Headphones with Mic and LED Lights for Xbox One, PC, Laptop (Red)

June 1, 2023

Latest News

ESSPOMNCE Wireless Earbuds, Bluetooth Earbuds, Earphones Wireless Bluetooth with Charging case, Ear Bud & in-Ear Headphones IPX6 Waterproof, Wireless Ear Buds with Mic Auto Pairing for Android iPhone

ESSPOMNCE Wireless Earbuds, Bluetooth Earbuds, Earphones Wireless Bluetooth with Charging case, Ear Bud & in-Ear Headphones IPX6 Waterproof, Wireless Ear Buds with Mic Auto Pairing for Android iPhone

June 1, 2023
Ukraine war: 'Children die' in new missile attack on Kyiv

Ukraine war: 'Children die' in new missile attack on Kyiv

June 1, 2023

Categories

Site Navigation

  • Home
  • About us
  • Contact us
  • Privacy policy
  • Terms and services
  • Home
  • About us
  • Contact us
  • Privacy policy
  • Terms and services

© 2022 Designed by news4global

No Result
View All Result
  • Home
  • Bitcoin
  • Blockchain
  • Business
  • Latest news
  • Market
  • Regulation
  • Videos

© 2022 Designed by news4global