Indian crypto reps call for taxation rules reduction saying that 1% TDS Is very high and could drive traders away from the market and even hurt the volume so let’s read more about it in today’s latest cryptocurrency news.
The call for reducing Tax Deduction at Source on crypto transactions Is only intensifying among the crypto ecosystem players in the country and a TDS of 1% on virtual assets has been approved by the Union Budget 2022-23. Terming this too high can drive traders away from the market and hurt the volumes as the Indian crypto reps call for rules change and to bring it down to 0.01% and 0.05%. Sathvik Vishwanath as the co-founder and CEO of one of the oldest Indian exchanges, Unocoin, said:
“I am nowadays meeting traders who are leaving India just because they cannot tolerate TDS. Govt is not going to achieve revenue this way. Even for Govt, it should be a volume game.”
Last week, the co-founder of CoinDCX Sumit Gupta said:
“At the industry, we are engaging with the government and have submitted a presentation on how 30% tax and more than that, 1% TDS is detrimental to the growth of the industry. It will lock up capital for traders and suck liquidity from the market. If liquidity is not there, retail investors will suffer.”
In the meantime, the government is planning a tougher tax environment for crypto businesses and the media reports suggested that the Indian tax authorities are planning to put the crypto activities under the 28% GST slab which is reserved for nonessential activities like betting, horse racing, and gambling. Gupta added:
“We will try to make it simple at our end but we still continue to engage and keep the dialogue open with the government asking them to bring down TDS to 0.01 or 0.05 percent. Income Tax of 30 percent is also on the higher side, which we are requesting them to bring down.”
The Budget 2022-23 brought some clarity about taxes on crypto profits but a 30% capital gains tax levied on profits made the crypto transactions without provision to offset losses. The tax rate is the same as applicable to the income from speculative transactions like horse racing. It also proposed 1% TDS on payments above 10,000 RS and made for the acquisition of the virtual digital assets in one financial year. The threshold was raised to Rs 50,000 for the individuals and families required to get their accounts audited. The capital gains tax became effective in April but the TDS will be levied in July.
During the debate on the budget proposals, some parliamentarians observed that the bad crypto regulation will cause an innovation exodus and these remarks turned out to be true as in the first ten days of the taxation policy, the trading volume and exchanges dropped dramatically.
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