The Lok Sabha, India’s lower house of parliament, passed Finance Bill 2022 on Friday, which includes a plan to tax cryptocurrency revenue at 30% and levy a 1% tax deducted at source (TDS) on every transaction. The 1% TDS will be implemented on July 1st, whereas the 30% income tax will be implemented on April 1st.
Ritesh Pandey, a member of Parliament, expressed concern over the 1% TDS on cryptocurrency transactions. In the Lok Sabha, he described how the crypto industry will be suffocated by this tax. For instance, he stated that if a user purchases cryptocurrency, then transfers the coins to a wallet and uses them to purchase a non-fungible token, he is violating the law (NFT).
At each stage, the user will be charged a 1% TDS. He exclaims;
“When you impose a 1% TDS at three stages, it will give birth to red tapism.”
“Doing so will also finish this asset class, which is very young.”
The 1% TDS on bitcoin, according to Indian Finance Minister Nirmala Sitharaman, is for tracking purposes and is nothing new. “TDS (tax deducted at source) is more for tracking,” she remarked in parliament on Friday. It is neither a new nor an additional tax.” The finance minister highlights the following:
“It is a tax that will help people track it, but at the same time the taxpayer can always”
” reconcile it with the total tax to be paid to the government.”
Nonetheless, many members of India’s crypto community agree with Parliament Member Pandey that placing a 1% TDS on crypto will have a detrimental impact.
“No loss setoff + 1% TDS will push a lot of traders to halt day trading or to transfer to international exchanges & dex,” Aditya Singh, co-founder of the Crypto India Youtube channel, said.
“1 percent TDS is an example of strangling the golden goose,”
So, Nischal Shetty, the founder of cryptocurrency exchange Wazirx says.
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