This week we spoke to a techie in Gurugram who works for a crypto company in Singapore. So far, so mundane. What’s different about this is that he chooses to receive his earnings in cryptocurrency. And he isn’t alone. Despite an imminent ban, it seems India’s tech freelancers are among the first people anywhere to ditch ‘real’-money payments in favour of crypto. Surprised? So were we.
Meet the Indian techies who get paid in crypto
Cryptocurrency firms are
recruiting engineers and back-end developers in India as contractors and paying them in cryptocurrencies to accelerate their adoption and bypass local taxes and laws regarding cross-border payments.
Why it matters: India still lacks a regulatory framework on cryptocurrencies, which means they are technically neither legal nor illegal. Many young engineers and freelancers are accepting payments in cryptocurrency due to the ease of transferring it across borders, and lower transaction costs compared to bank transfers.
A word of caution: Legal experts, however, said that accepting payment in cryptocurrency falls in a legal grey area and that such transactions could be in violation of the Foreign Exchange Management Act (FEMA) as they constitute cross-border payments in a currency not recognised by the Reserve Bank of India, and can be used to evade taxes.
Nothing is certain, except debt and taxes
India’s tax authorities have begun asking startups to
explain their ambitious valuations. Even as such companies rack up losses, they often sell stocks to investors at steep premiums based on growth projections.
Now, the tax department has started to question the valuation of several startups. They do this by invoking a rarely used law that empowers the principal commissioner or commissioner to revise the order passed by the assessing officer.
Why it matters: Many startups may find themselves vulnerable before the taxman if their business projections go haywire or assumptions that go into pricing of shares and valuing a company appear unrealistic.
Companies that are recognised as startups by the Department for Promotion of Industry & Industrial Trade (DPIIT), upon fulfilling certain conditions, are spared the tax that other unlisted companies have to pay on the amount received by way of premium over the fair market value (FMV). While startups arrive at this FMV using methods laid down by the department, tax officials can question the parameters and assumptions in calculating the final valuation.
What is Angel tax?
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ETtech Deals Digest
The week saw large funding rounds, with three startups
raising $100 million or more. US-based investor Tiger Global participated in all three. India’s startup ecosystem has also seen two more companies—Innovaccer and Infra.Market—become unicorns in the past five days.
Twitter to build a paywall
has announced plans to offer a subscription-based service in which users would
pay for special content from high-profile accounts. This move is part of the social media firm’s search for new revenue streams other than advertising.
What’s new? While Twitter hasn’t shared many details, the feature, called “Super Follows”, would allow users to subscribe to exclusive content from other accounts. The platform unveiled the plan at its annual investor meeting and presented the feature as a way for Twitter users to financially support creators and receive exclusive content such as newsletters and virtual badges in return.
How safe is Chrome’s ‘incognito’ mode?
While Google says activating stealth mode in Chrome means the company won’t record your browsing history, a US judge with a history of taking Silicon Valley giants to task over their data collection practices has raised doubts about this,
US District Judge Lucy Koh, at a hearing in San Jose, California, said she’s “disturbed” by Google’s data collection practices. She is hearing a class-action lawsuit that describes the company’s private browsing promises as a “ruse” and seeks $5,000 in damages for each of the millions of people whose privacy has been compromised since June 2016, the report said.
This comes weeks after Google faced
a major lawsuit as a group of 38 US states and territories filed an antitrust complaint, accusing the tech giant of seeking to extend its search monopoly to dominate smart speakers, televisions and cars. The search giant has faced many antitrust complaints over the past year, which accuse it of abusing its dominance in digital advertising and online search.