Parliament passes Crypto tax law in India, effective from April 1

Indian investors are extremely sad after the Finance Minister of India, Nirmala Sitharaman’s introduced the crypto tax framework passed as an amendment to the Finance Bill to become law in the country.

On Friday, the lower house of parliament, the Lok Sabha, passed the 2022 Finance Bill with 39 fresh amendments proposed by the Finance ministry. The amendment to crypto law establishes a 30% tax targeting digital assets and NFT transactions and does not allow for deductions from trading losses while calculating income. Additionally, India will also impose another 1% tax deducted at source (TDS).

As per the new amendment proposed in the Finance bill 2022 to sections of crypto tax.

Loss cant be set off against any profit. Similar to betting tax rules. #reducecryptotax

— Aditya Singh (@CryptooAdy) March 25, 2022

Starting on April 1, those who undertake crypto trades will be liable to a 30% tax, while the 1% TDS requirement will take effect on July 1. Many Indian politicians in parliament, as well as local industry leaders, have criticized the proposed framework, claiming that it will “kill crypto” in the nation.

“We firmly believe that there is a need to regulate and tax crypto but in its current form, it is poised to do more harm than good,” WazirX founder and CEO Nischal Shetty said. 

“It can result in cascading participation on Indian exchanges that adhere to the KYC norms and lead to a rise in capital outflow to foreign exchanges or to the ones that aren’t KYC compliant. This is not conducive for the government or the crypto ecosystem of India,” he added.

Crypto tax situation worldwide

Crypto tax is one of the major concerns that investors have which comes with several challenges like unclear policies, unclear tax reporting criteria, and whatnot. While some governments want their citizens to report by themselves, countries like Australia say that they don’t trust the tax reporting by their citizens.

South Korean investors are intensively confused by their authorities for not being clear on crypto taxation. The lawmakers in South Korea have delayed the crypto tax law for another year.