Indian Federal and Finance Minister Will join The June 28-29 panel will decide whether to introduce an additional 28% tax on cryptocurrency transactions.
The tax in question is in addition to the 30% crypto income tax already in place.
The panel is reportedly unable to finalize rates during the two-day meeting. But it is certain that they will discuss the tax rate at the maximum tax rate of 28%.
I didn’t have enough income tax
The 30% cryptocurrency income tax came into effect in February 2022. India’s Finance Minister Nirmala Sitharman described tax law as another step towards aggressive cryptographic regulation.
Citalman said:
“Income from the transfer of virtual digital assets shall be taxed at a tax rate of 30%. Except for acquisition costs, deductions for expenditures or allowances shall not be permitted while calculating such income. . “
Within months of the new tax rate, the volume of crypto transactions has dropped by 30%. The tax rate also urged major exchanges such as Coinbase and FTX to consider a complete withdrawal from the Indian market.
However, Indian authorities did not believe that a 30% tax on income would be sufficient. A few months after the tax was implemented, a former Indian finance minister said cryptocurrencies are like gambling and more taxation is needed to discourage people from joining cryptocurrencies. Told.
He urged the current government to raise the tax rate to 40 or 50%, saying:
“There is no advantage of cryptocurrencies in this country. I ask young people in this country not to go to cryptocurrencies.”
Incoming additional taxation
In addition to the 30% crypto income tax, the Government of India is considering applying two additional taxes to the crypto industry.
DeFi
The 30% tax rate was applied to profits earned through a centralized exchange platform. To avoid heavy taxation, many Indians turned to DeFi projects that are outside the scope of crypto income tax.
However, the Government of India noticed changes in investor behavior and took special precautions.
In May 2022, it became clear that India’s Central Commission on Direct Tax (CBDT) was looking for ways to introduce an additional 20% tax on income earned through DeFi.
transaction
The 28% tax rate, which the Council will discuss next week, was also first proposed by the Goods and Services Tax Council (GST) in India in May 2022.
GST equated cryptocurrencies with gambling, betting and lottery. GST has established a law commission to classify the scope of cryptography in these activities and propose appropriate tax rates.
The Commission in question mentioned the possibility of applying an additional 28% tax rate on cryptocurrency transactions to discourage Indian cryptocurrencies.
