Members of the Indian Parliament have warned that imposing a tax withholding of 1% tax (TDS) on all crypto transactions will kill the initial asset class. This tax provision is included in the financial bill 2022 held by Lok Sabha, the House of Representatives of India. However, the Indian Finance Minister claims that the TDS for crypto trading is for tracking purposes.
Parliamentarians raise concerns about more than 1% TDS in crypto trading
The Indian House of Representatives, Lok Sabha, passed the financial bill 2022 on Friday. This includes a proposal to impose a 30% tax on cryptocurrency income and a 1% withholding tax (TDS) on all cryptocurrency transactions. 1% TDS will be enabled. Income tax of 30% will be collected from April 1st from July 1st.
Parliamentarian Ritesh Pandey expressed concern about the 1% TDS in crypto trading and explained in Lok Sabha how this tax would kill the crypto industry. For example, if a user purchases crypto, they transfer coins to a wallet and use them to purchase non-fungible tokens (NFTs), and the user will be charged 1% TDS at each stage.
Imposing a 1% TDS in three stages creates bureaucracy. Doing so also ends this very young asset class.
However, India’s Finance Minister Nirmala Sitharaman argues that the 1% TDS of cryptocurrencies is for tracking purposes and is not new.
She said in parliament on Friday: “TDS (Tax withholding) is for tracking purposes. It is neither an additional tax nor a new tax,” the Finance Minister emphasized.
It’s a tax that helps people track it, but at the same time taxpayers can adjust it to the total tax payable to the government at any time.
Nonetheless, many in the Indian crypto community agree with MP Pandy about the negative effects of imposing a 1% TDS on crypto.
Aditya Singh, who co-founded the Crypto India Youtube channel, comment: “With no loss offset and 1% TDS, many traders need to stop day trading or move to international exchanges and Dex,” he added. “Income” of the Indian government.
Cryptocurrency Exchange Founders Wazirx, Nischal Shetty, I got it “1% TDS is an example of killing a gold goose,” he said.
We hope the government will revisit this and reduce or eliminate this TDS to help the crypto industry grow further.
What do you think about how India plans to tax cryptocurrency income and transactions? Let us know in the comments section below.
Image credit: Shutterstock, AIXabay, Wikicommons
Disclaimer: This article is for informational purposes only. It is not a direct offer, a solicitation to buy or sell, or a product, service, or corporate recommendation or approval. Bitcoin.com does not offer investment, taxes or laws. , Or accounting advice. Neither the company nor the author is directly or indirectly responsible for any damage or loss caused or allegedly caused by the use or dependence of the content, products or services described in this article. .. ..