Crypto community criticises 'regressive' govt's crypto tax clarifications, demands fair crypto tax
According to new tax laws on virtual digital assets, traders cannot balance losses incurred from one digital asset against profits from another.
Players in the Indian cryptocurrency industry have unequivocally criticised the government's recent cryptocurrency tax policy.
The news follows a recent clarification by the minister of state for finance in Lok Sabha regarding the taxation on virtual digital assets (VDA). Crypto traders now cannot balance the losses incurred from one virtual digital asset with profits of another virtual digital asset.
Indian cryptocurrency industry insiders expressed their displeasure with the government's crypto tax policy and condemned it as unfair and regressive.
Sumit Gupta Co-founder and CEO of CoinDCX, tweeted against the 30 percent crypto tax and urged the government to reduce the crypto tax.
According to WazirX founder Nischal Shetty, the tax policy is regressive and discourages crypto adoption in the country. "Hope Indian Government hears the youth and ensures that Indian crypto industry remains competitive," he said.
The new tax rule will come into effect from April 1, 2022, and the government's crypto tax policy mandates traders to treat each investment and profit or loss on a digital asset independently. Kashif Raza, crypto advocate, and founder of crypto education platform Bitinning turned to Twitter to explain how losses incurred in one VDA cannot be adjusted against other profits.
Indian crypto industry experts are concerned that high tax may discourage traders. Sathvik Vishvanath CEO and Co-Founder of Unocoin turned to Twitter to express his disappointment with the proposed tax rules.
"The govt should embrace crypto industry to take advantage of the exciting investment, innovation and employment opportunities. Proposed tax rules are not at all encouraging. "
Crypto experts are questioning the 1 percent tax deduction at source (TDS) for each transaction and crypto entrepreneur, Naimish Sanghvi, advised traders to sell everything they own by March 31, 2022, and start fresh from April 2022.
Aditya Singh, Co-Founder of Crypto India in a tweet expressed the new tax rules would affect the entire industry and Sigh had earlier initiated an online campaign on change.org, petitioning the finance minister to review the proposed tax rules.
"New crypto tax rules are too harsh and will hurt the entire industry if they are not changed. This will result in brain drain, kill trading, mining, and on top of that will create a lot of confusion. Only a few days remain before it becomes applicable."
However, countries including South Korea and the United Arab Emirates had proposed similar high crypto taxes but the policies failed and the government reduced the tax to become more crypto- friendly. Recently, Thailand, which had previously imposed a 15 percent crypto capital gains tax, opted to repeal it after severe backlash.
