India’s Finance Law 2022 with new 30% crypto tax rules has been approved by the Rajya Sabha, the upper house of India’s Parliament, to make it law today, effective April 1.
The approval of the bill by the Upper House of Parliament comes within a week of the approval of the Lower House (Lok Sabha).
The Finance Bill was introduced during Parliament’s 2022-23 budget session in January. The Finance Act changed tax rules to levy a 30% crypto tax on ownership and transfer of digital assets. Aside from that, traders cannot offset their losses against profits and each trading pair is counted individually for the tax deduction.
As per the new amendment proposed in the Finance Act 2022 on Crypto Tax Sections.
Losses cannot be offset against winnings. Similar to betting tax rules. #Reduce crypto tax
— Aditya Singh (@CryptooAdy) March 25, 2022
When a 30% tax wasn’t regressive enough, the government also imposed a 1% withholding tax (TDS) on every trade, claiming it would help them track money movements. However, exchange operators have warned that the 1% TDS would dry up liquidity.
Related: Taxman: India’s new tax policy could prove fatal for the crypto industry
The infamous bill has come under scrutiny from various pundits, traders, and exchange operators alike. However, the government decided to continue its regressive approach without soliciting input from crypto ecosystem stakeholders.
Another reason for the crypto community’s outrage is the fact that the new crypto tax was heavily inspired by countries’ gambling and horse betting tax regulations. This means that the Indian government is comparing the crypto market to gambling.
“It is not illegal to buy/sell crypto assets in India, but we have introduced taxes that treat it like horse racing winnings.” – TV Somanathan (India Fin Secretary).
It has more to do with their perspective than just taxes. #Reduce crypto tax #fair crypto tax Day-53 #IndiaWantsCrypto @unocoin
— Sathvik Vishwanath (Unocoin) (@sathvikv) March 26, 2022
New crypto tax policy in India was finalized and approved within two months, while the Treasury is yet to provide a regulatory framework for the burgeoning market, despite years of assurances. Many crypto entrepreneurs in the country believe that this would lead to a brain drain of talent and traders would eventually turn to decentralized exchanges and overseas platforms to conduct their crypto trading.
https://cointelegraph.com/news/30-crypto-tax-becomes-law-in-india-following-finance-bill-approval 30% crypto tax becomes law in India after approval of Finance Act