India’s approval of the Finance Bill has spurred different reactions from both the crypto community and the broader finance industry. The bill, announced by India’s lower house of the bicameral parliament, has stipulated that Indians will start paying a capital gains tax of 30% on cryptocurrency transactions.
The Bill Will Be Passed On April 1
Apart from the capital gains tax, those transacting in crypto will also have to be a 1% tax deducted at source (TDS). But there is no provision to take deductions for losses. According to the announcement, the crypto tax bill will be passed into law on April 1, while the TDS will begin three months later.
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Nirmala Sitharaman, India’s finance minister introduced the billion to both the lower and upper chambers of the House of Parliament.
The upper house plays a minor role in finance legislation in India, but it added and made suggestions to the recent bill.
More than 20 members of the lower house of Parliament have criticized the bill for its lack of clarity regarding the definition of crypto. Others are more concerned that the new crypto tax will signal the end of the digital assets industry in India.
Finance Minister Backs Bill
The crypto community in India has kept pouring out their annoyance and frustration about the tax bill, with many saying it will do more harm than good.
Nischal Shetty, Chief Executive Officer of India’s major crypto exchange WazirX, stated that the bill can lead to an increase in capital outflow to foreign exchanges, which is not good for the industry.
While responding to the reactions, Sitharaman stated that “there is no confusing signal.” She added that the committee is still making consultations regarding the regulation of cryptocurrency or its outright ban. However, Sitharaman defended the bill on crypto taxation by pointing out that since people are profiting from the business, it is proper for the government to tax them.
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