A new finance bill in India could pose to deter people from trading cryptocurrency in the country. The Finance Bill, which includes proposed rules on taxing crypto, is set to be introduced in parliament on Thursday, 24th March 2022.
The new Indian Finance Bill is one that has been described as an ‘over-taxed bill’ that seeks to take advantage of cryptocurrency traders and stakeholders by imposing a tax levy on cryptocurrency gains in the Asian country.
According to the bill, the crypto taxation proposals include a 30% capital gains tax, a 1% tax deducted at source (TDS), no offsetting of losses and taxation of gifts received in crypto. Investors King gathered that when the announcement was initially made, it spurred excitement and unclarity for many Indians – excitement because many Indians believed that the bill was a bid to show support for cryptocurrency in India. However, receiving clarity from the government that cryptocurrencies remain unregulated in India and just because they are taxed, it does not mean they are legal.
Following the announcement, many Indians have taken to various platforms to demand that the tax values are reduced and most especially the reality that Losses from one cryptocurrency cannot be used to offset gains from another cryptocurrency under new tax rules. Efforts to reduce the taxes in the form of a petition filed on change.org and a number of online campaigns like #reducecryptotax, as well as meetings between industry stakeholders and the government.
Speaking about the new tax laws, Subhash Garg, former secretary in the Finance Ministry’s Department of Economic Affairs said: “I don’t expect the government to make any changes to the proposals on 30% capital gains tax, the 1% TDS or on other aspects of the tax proposals that needed clarity such as the offsetting of losses.”
The new bill does not only stifle people’s interest in trading cryptocurrency, but it also positions the country as a harsh environment for doing innovative digitised businesses. The law, most especially the “no offsetting of losses and taxation of gifts received in crypto,” is one that many people have said will reduce people’s interest in the digitised currency.
