Crypto industry wants govt to lower TDS on transactions
As per current crypto regulations, capital gains or profits on cryptocurrencies will be taxed at 30% with an additional TDS tax of 1% on all trading transactions.
PremiumThe crypto industry has urged the government to reduce the TDS on payments towards gains arising from trading in cryptocurrencies to 0.01 or 0.05%, from the proposed 1%, saying it will hurt retail traders.
As per the current crypto regulations, capital gains or profits on cryptocurrencies will be taxed at 30% with an additional TDS tax of 1% on all trading transactions.
The 2022-23 Budget has brought in clarity concerning the levy of income tax on crypto assets. From April 1, a 30% I-T plus cess and surcharges, will be levied on such transactions in the same manner as it treats winnings from horse races or other speculative transactions.
Also, while computing the income from transfer of VDA, no deduction in respect of any expenditure (other than the cost of acquisition) or allowance will be allowed.
The provisions related to 1% TDS will come into effect from July 1, 2022, while the gains will be taxed effective April 1.
CoinDCX CEO and Co-Founder Sumit Gupta said 30% tax on income from cryptocurrencies is on the higher side and should be reduced.
"At the industry (level), we are engaging with the government and have submitted a presentation on how 30 per cent tax and more than that, 1 per cent TDS is detrimental to the growth of the industry. It will lock up capital for traders and suck liquidity from market. If liquidity is not there, retail investors will suffer," Gupta told reporters.
Meanwhile, he said CoinDCX is also engaging with the traders on its platform to comply with the new tax noms.
Cryptocurrency volumes in India have dropped new laws to tax the digital assets kicked in on 1 April, according to Bitcoin.com. The Parliament approved the Finance Bill, which effects the cryptocurrency taxational laws announced in Budget.
"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 (tax deducted at source) to 0.01 or 0.05%. Income Tax of 30% is also on the higher side, which we are requesting them to bring down," Gupta said.
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