India confirms discriminatory tax rate for crypto investors

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Source: Adobe/Palange_R

From April 1 this year, and despite the efforts of the crypto industry, crypto-asset earnings in India will be taxed at 30% – the highest tax bracket, the Parliament of India confirmed today. country. Compared to this tax, the tax rate on stock market transactions varies from 0% to 15%.

Now taxed in the same way as lottery winnings, all “virtual digital assets” – from bitcoin (BTC), to airdrops and crypto giveaways, to NFTs – fall under the latter tax ruling.

By According to a previous report from Business Insider India, crypto investors and traders in the country will need to keep an eye out for several provisions that will affect their 2022-2023 fiscal year:

  • all crypto profits made during the year will be taxed at a flat rate of 30%;
  • crypto-assets that have not been sold – so the gains have not been “realized” – will not be taxed until a portion of them has been sold, even if the price of the asset has increased since the time it was purchased;
  • after accounting for all crypto transactions made during the year, if there is an overall loss with no profits made, the tax will not be paid;
  • those who derive all/most of their income from crypto can report their income as business income, but no deduction of business expenses will be allowed;
  • showing crypto profits as capital gains which are taxed up to 20% plus surcharge will not be allowed;
  • there is a 1% withholding tax (TDS) on all crypto trade redemptions, which must be deducted “presumably by the crypto exchange” the investor is using, according to the report – therefore, the TDS is deducted from the total value of the transaction even if the investor makes a loss.

The latter will “nibble” his capital, notes the report, citing players in the sector, such as Nithin Kamath of Zerodha Exchange platform.

The crypto industry has been actively fighting this latest bill since the taxes were proposed in February, but as attempts to relax the provisions have failed, the case could still be taken to the Supreme Court. .

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Learn more:
– Indian crypto tax shift
– Indian Parliament unlikely to discuss crypto bill during budget session – Finance Minister

– Crypto Tax Trends in 2022: Increased Reporting, Updated Rules, and the Wealth Tax Debate

– India Still Debating Crypto Regulation – Finance Secretary
– Indian Advertising Watchdog releases new guidelines for crypto ads

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