Businesses associated with crypto activities in India are making little or no money under this tax regime.
The Bharat Web3 Association has once again condemned India’s tax rules, which have frequently come under fire from Indian investors (BWA). The industry body, which was established in November of this year, is said to have met with senior officials from India’s finance ministry to review and express concerns about the country’s crypto-related policies and judgment. During the discussion, BWA representatives stated that India’s ‘unfriendly’ taxation of crypto gains is impeding the sector’s overall growth.
The BWA, which includes members from Indian crypto players such as WazirX and CoinSwitch Kuber, intends to play an active role in assisting India in developing adequate laws to govern the virtual digital assets (VDA) industry.
“The BWA aims to highlight the impact of existing tax provisions such as TDS, tax on income from VDAs, and not allowing loss carryover on the wider industry and share its inputs on suitable amendments,” BWA representatives said, according to a CryptoPotato report.
Since April, all income generated by crypto transactions has been taxed at 30% in India, and a 1% tax deducted at source (TDS) for crypto transactions has been in place since July.
Businesses associated with crypto activities in India are making little or no money under this tax regime.
The average daily transaction volume on Indian exchanges WazirX, CoinDCX, BitBNS, and Zebpay dropped to $5.6 million (roughly Rs. 44 crores) in August, immediately after the tax laws went into effect. Until June, this figure hovered around $10 million (roughly Rs. 80 crores).
In September, a tea seller in Bengaluru, India, who accepted crypto payments at his modest stall, admitted to making no money from his crypto earnings. Shubham Saini, a 20-something, stated that he was seeing two to three crypto transactions per day.
For the time being, the finance ministry has yet to respond to the BWA’s tax-related suggestion.
The BWA has suggested that the finance ministry reconsider and rationalize the taxation of VDAs as part of its recommendations.
Furthermore, the BWA has requested that the finance ministry expedite work on the crypto rules.
The finance ministry is still working on developing rules for the crypto industry. India assumed the presidency of the G20 group of nations on December 1.
Last year, Finance Minister Nirmala Sitharaman stated that one of India’s top priorities is to collaborate with the other 19 G20 member countries in developing an international framework for cryptocurrencies.
