The upper house of the parliament in India, Rajya Sabha, approved the Finance Bill 2022 that imposes a 30% tax on crypto, on both transactions and the holding of digital assets. As per the official announcement, the Indian parliament made the bill into law starting today, while the law is scheduled to come into effect already from the 1st of April.
In addition to users in India being obliged to pay 30% tax on all crypto transactions and holdings, the Finance Bill 2022 also prohibits the offset of losses against profits, while at the same time trading pairs will be counted independently when calculating the taxes.
Moreover, on top of the concerning 30% tax on crypto, the Indian government also imposed the TDS (tax deduction at source) tax of 1% on literally each and every crypto trade in the country. According to the government, the idea of this approach is to enable monitoring of the funds with greater ease. However, the crypto exchanges issue a caution that the 1% tax deduction is a great peril to the liquidity of the assets.
This news from India comes no more than just one week after the lower house of the Indian parliament, Lok Sabha also approved the controversial crypto bill. The main concern and the biggest reason for the outrage of the crypto community is the fact that the Indian government treats crypto like it is horse racing, i.e. gambling.
Sathvik Vishwanath, CEO and co-founder of Unocoin, one of the largest crypto/bitcoin exchanges in India, posted a Tweet citing the Financial Secretary of India, T.V Somanathan, where the Secretary states that while purchasing crypto is not considered illegal, the taxation makes “it like winnings from horse races”.
Consequently, the crypto community criticizes the Indian government for creating the Financial Bill 2022 by taking examples from horse betting and gambling rules from around the world. According to the experts, this is a dire situation for the crypto scene in India, especially since this will practically force the crypto community in the country to seek outside solutions.
This includes using platforms and crypto exchanges from foreign countries, it this is something that the experts warn may greatly backfire on the Indian government in the future.
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