Crypto industry asks center to review 30% tax on virtual assets: report

Amid demands for clarity on the digital asset tax recently announced in the Union Budget 2022-23, major cryptocurrency players plan to submit a memorandum to the Ministry of Finance urging the government to review the rules on virtual digital asset transactions.

Talks are underway to formulate and submit a white paper on the impact of the recently proposed tax on the domestic cryptocurrency industry and economy, Business Today reported, citing sources.

According to sources, the memorandum will be authored by industry leaders and led by the Blockchain and Crypto assets Council (BACC), which is part of the Internet and Mobile Association of India (IAMAI). BACC did not respond to questions from the business magazine.

The new tax rule will come into effect on April 1, Finance Secretary TV Somanathan told Business Today earlier. “What changes is the tax system. It is taxable even before April 1 but not at 30%,” Somanathan said.

Crypto industry experts fear that the high tax could deter India’s skyrocketing exchanges. The industry wants the government to lower tax rates to the same level as other asset classes, BT said citing Kashif Raza, founder of crypto education platform Bitinning. Another concern is that the imposition of a tax means cryptos are transacted on Bpar along with gambling and betting.

Following the budget announcement, Somanathan had told Bloomberg Television that the government does not consider trading in crypto assets to be illegal. “We now have a tax framework in place that treats crypto assets the same way we treat winnings from horse racing, or betting and other speculative transactions,” he said.

Additionally, the industry believes that 1% TDS will impact trading volumes on national exchanges.

Meanwhile, 75,000 people have signed the petition launched by investors and crypto enthusiasts, urging the government to reduce the 30% tax on virtual assets, Moneycontrol reported.

Seeking a reprieve, the petition states that the crypto industry contributes significantly to the country by attracting FDI investment, providing jobs, GST payments, and generating tax revenue.

(Edited by : Shoma Bhattacharjee)

Previous RFG Advisory recognized as one of the Best Places to Work for Financial Advisors in 2022 by InvestmentNews for the second consecutive year
Next Federal Maritime Commission continues to address detention and demurrage issues | Holland & Knight LLP