The crypto environment in India has become more stringent after the parliament passed a controversial tax proposal on Friday, snagging away concerns put forth by the crypto traders in the country.
As per the Finance Bill for FY 2022-23, Indians will have to pay a 30% tax on crypto transactions as early as 1 April. Additionally, Indians will also have to pay a 1% tax deducted at source (TDS) on every crypto transaction and pay taxes on crypto gifts, with no ability to take deductions for losses.
The Indian crypto community received the news with a heavy heart, with many expecting the government officials to ease tax laws after they were proposed in February.
Twitter handle @CryptoBoomNews expressed sorrow on India’s stance on crypto, suggesting pushing away innovation could become costly.
Twitter handle @JToys even went as far as saying that the Indian crypto scene has come ‘dead’.
Indian Government Split On Decision
It’s not just the crypto community that criticized the law, but several members of the Indian Parliament were against the direction. MP Pinaki Mishra was reported to have said that “To ban crypto is equivalent to banning internet. It is an idea whose time has come.” He also suggested that the TDS be reduced to 0.01% to make it feasible for Indian investors. MP Ritesh Pandey said the Government ‘is hampering the crypto industry through the new tax regime’.
Counterarguments from other Parliament members mostly revolved around exhausted narratives, such as crypto fuels the darknet and is used for illegal activities. While Finance Minister Nirmala Sitharaman gave a slight ray of hope after reiterating that consultations on regulations were ongoing, she added that until the regulations are decided, the crypto tax would continue as planned.