The Indian Finance Bill 2022 with new 30% cryptocurrency tax rules was approved by Rajya Sabha, the upper house of the Indian parliament, to make it a law today that will be in effect from tomorrow i.e., April 1.
The bill’s approval by the upper house of the parliament comes within a week after the Lok Sabha (lower house) approval. The Finance Bill was tabled during the budget session 2022-23 of the parliament in January. The Bill amended tax rules to impose a 30% crypto tax on digital asset transfers and holdings. Besides, traders can’t offset their losses against benefits and each trading pair will be regarded independently for the tax deduction.
If 30% tax wasn’t rigid enough, the government also imposed a 1% tax deduction at source (TDS) on each trade, claiming it would aid them to monitor the movement of funds. However, exchange operators have cautioned that the 1% TDS would dry up liquidity.
The Bill has been surveyed by many traders, experts, and exchange operators alike. However, the government decided to continue with its regressive approach without taking input from the stakeholders of the cryptocurrency world.
Another reason for anger from the cryptocurrency community is that the new cryptocurrency tax has been heavily imposed by the nation’s horse betting and gambling tax rules. This indicates that the Indian government likens the cryptocurrency market to gambling.