The Indian Finance Bill 2022, which includes new 30 % crypto tax laws, was adopted by Rajya Sabha, the upper house of the Indian parliament, on March 31, making it a law that will take effect on April 1. The law was approved by the upper house of parliament less than a week after the lower house (Lok Sabha) approved it.
As per the new amendment proposed in the Finance bill 2022 to sections of crypto tax.
Loss cant be set off against any profit. Similar to betting tax rules. #reducecryptotax
— Aditya Singh (@CryptooAdy) March 25, 2022
The Finance Bill was first introduced in January during the parliament’s budget session of 2022–23. The Finance Bill changed the tax regulations to levy a 30% crypto tax on digital asset ownership and transactions. Aside from that, traders will not be able to balance their losses against their earnings, and each trading pair will be treated separately for the tax deduction. If a 30% tax wasn’t regressive enough, the government imposed a 1% tax deduction at source (TDS) on each trade, stating that it would help them trace the transfer of cash. However, exchange operators have warned that the 1% TDS would suffocate liquidity.
“It is not illegal to buy/sell crypto assets in India but we have put taxation treating it like winnings from horse races..” -T.V Somanathan (India Fin Secretary).
It has more to do with their view than just tax. #reducecryptotax #faircryptotax Day-53 #IndiaWantsCrypto @Unocoin— Sathvik Vishwanath (Unocoin) (@sathvikv) March 26, 2022
The controversial bill has been studied by a wide range of professionals, traders, and exchange operators. However, the government opted to continue with its regressive strategy without consulting with the crypto ecosystem’s stakeholders. Another reason for the crypto community’s concern is that the new crypto tax was significantly influenced by nations’ gambling and horse betting tax policies. This indicates that the Indian government compares the cryptocurrency sector to gambling.
Despite years of assurance, India’s new crypto tax policy was drafted and passed in less than two months. Many crypto entrepreneurs in the nation fear it would result in a brain drain of talent, with traders eventually turning to decentralised exchanges and overseas platforms to conduct crypto trades.
