Crypto industry to move Centre, seeking revision of 30% levy on transactions
Days after the 2022 Union Budget proposed a 30 percent tax on the sale or purchase of virtual digital assets like cryptocurrencies, the Indian crypto industry plans to seek a revision of the rate from the government.
Drafting a memorandum to that effect, the proposal, which will be headed by the Blockchain and Crypto Assets Council (BACC), will take into consideration the various implications of the new tax rules and their impact on the domestic crypto ecosystem and the economy at large.
The Budget also mandated an additional 1 percent TDS to be levied on crypto transactions exceeding a certain limit with the intention of establishing a record trail.
While such a virtual digital gift would be made taxable at the hands of the recipient, any losses incurred during the course of the transaction would not be eligible for a write-off against any other source of income. Except for deductions involving the cost of acquisitions, nothing else would be allowed.
Finance Secretary TV Somanathan had recently mentioned how cryptos are "legal, taxable, though unregulated" in India at present. He mentioned that taxing these virtual digital assets should not be equated with a stamp of government approval on crypto as a "solid asset class".
Somanathan noted that only the tax regime has changed, while the positive taxability status of crypto income remained unchanged. “The Income Tax Act does not exempt any income other than agri income. Income from cryptocurrencies has been taxable even before this law, it is taxable today, and it will be taxable after April 1. What is changing is the regime of taxation. It is taxable even before April 1 but not at 30 percent,” he said.
Many expressed disappointment over the steep taxation rates as well.
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