A cryptocurrency tax framework introduced by India’s Finance Minister Nirmala Sitharaman will become law in the country after it is passed as an amendment to the Finance Act.
India’s lower house of parliament, the Lok Sabha, passed on Friday the Finance Bill 2022, which included 39 amendments proposed by Sitharaman. The change to crypto 30% tax introduced Target transactions involving digital assets and non-fungible tokens that did not allow for trading loss deductions when calculating income. In addition, taxpayers in India are subject to an additional 1% withholding tax (TDS).
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
Under the framework, those conducting crypto transactions will be subject to a 30% tax from April 1, while the 1% at source requirement will go into effect on July 1. The proposed framework was also rejected by many Indian lawmakers in Parliament, as local industry leaders would argue that the legislation would likely “kill” crypto in the country.
“What does a 1% TDS do with the blockchain business?” called Member of Parliament Ritesh Pandey. “It’s important to understand that what the Treasury Secretary has done by introducing this 1% TDS into the blockchain industry will hamper the way this business is conducted.”
Pinaki Misra, another member of the Lok Sabha, added:
“Today, banning cryptocurrency is tantamount to banning the internet. It’s an idea whose time has come […] the government has increased to 30% [tax] on the basis that it must be higher [capital gains tax] because it is a kind of sin.”
Finance Act 2022 passed.
(For now) done #crypto Law :
30% tax on crypto, #NFT profits
No inter-crypt drop off, take away
No expense deductions, mining expense accounting
(No clarity yet on foreign equity/DeFi/ICO launched in India, bank support)
— Warun | Blockchain Lawyer (@Blockchainlaw91) March 25, 2022
With the addition of crypto tax policy, India has one of its first regulatory frameworks for digital assets after a 2020 ruling by the country’s Supreme Court overturning a ban by the Reserve Bank of India on banks trading with crypto firms. Appeal to the highest court would likely be one of the few legal avenues available to opponents of the newly passed framework to seek a reversal.
A bill that proposed ban on “private cryptocurrencies” in India had previously been mentioned in parliamentary business. However, the government agency is not scheduled to hear a discussion of the legislation during its current session, which ends on April 8.
https://cointelegraph.com/news/crypto-tax-policy-framework-passes-india-s-parliament-despite-pushback-from-lawmakers Crypto tax policy framework passes India’s parliament despite opposition from lawmakers