Tax man: India’s new tax policies could prove fatal for crypto industry

cointelegraph.com:

Indian crypto tax policy has become the hottest topic for Indian crypto traders and exchange operators as it is set to become law on March 24 and will come into effect starting on April 1. 

The proposed 30% crypto tax is the highest in the country and is equivalent to the tax imposed on gambling and lottery tickets. While the high tax bracket was already a cause of concern for many new and small traders, a recent clarification from the government has made things even more complicated for the Indian traders.

The parliamentary clarification on March 22 indicated that each crypto trading pair would be independently considered and traders can’t offset their losses against profit on another trading pair. This means if a trader invests $100 each in two tokens and incurs losses on one investment while making a profit on another trade, they would have to pay taxes on their profitable trade without accounting for the losses.

Nischal Shetty, founder of WazirX crypto exchange, told Cointelegraph, “As per response by P.P. Chaudhary in the parliament today, investors will not be able to offset losses from one crypto trading pair by gains from another type. Moreover, it also mentions that the mining infrastructure costs will not be included in the cost of acquisition to be claimed as a deduction.” 

Previously, a 1% transaction deduction at source (TDS), which was supposed to come into effect on June 1, was the primary concern for crypto entrepreneurs and exchange operators, as they believed a 1% TDS on each crypto trade would dry up liquidity on exchanges. 

If you start with a capital of RS 51000, by trade no 11 - 10% of your capital will be locked as TDS and 50% by trade no 69.

However, many believe that this recent clarification about