India’s Crypto Tax Regime Draws Criticism from Bharat Web3 Association, Details Here
India's tax rules, that have often found themselves at the end of criticism from Indian investors, have yet again roped-in reproval from the Bharat Web3 Association (BWA). The industry body, that was founded in November this year, reportedly met with senior officials from India's finance ministry to review and voice concerns about India's crypto-related policies and judgement. During the discussion, representatives from BWA noted that India's ‘unfriendly' taxation on crypto gains is hindering the overall growth of the sector.
The BWA, comprised of members from Indian crypto players like WazirX and CoinSwitch Kuber, is looking to participate actively in helping India formulate adequate laws to govern to virtual digital assets (VDA) industry.
“The BWA aims to highlight the impact of the existing tax provisions such as TDS, tax on income from VDAs, and not allowing carrying forward of losses on the wider industry and share its inputs on suitable amendments,” a CryptoPotato report quoted the BWA representatives as saying.
In India, all income churned from crypto transactions are being taxed at 30 percent since April and a 1 percent tax deducted at source (TDS) for crypto transactions has also been live in India since July.
Under this tax regime, businesses linked to crypto activities in India are seeing little or no profits whatsoever.
Immediately after the tax laws went live, the average daily transaction volume on Indian exchanges WazirX, CoinDCX, BitBNS, and Zebpay had dipped to $5.6 million (roughly Rs. 44 crore) in August. Up until June, this volume was around $10 million (roughly Rs. 80 crore).
In September, a tea-seller from India's Bengaluru, who opened crypto payments at his humble stall, had admitted to seeing no profits on his crypto earnings. Shubham Saini, the 20-something year old had said that he was seeing two to three transactions in crypto.
As for now, the reaction from the finance ministry on the tax-related suggestion given by the BWA remains awaited.
As part of its suggestions, the BWA has suggested the finance ministry to re-think and rationalise the taxation of VDAs.
In addition, the BWA has also asked the finance ministry to accelerate work on drafting the crypto rules.
The finance ministry is still in the process for formulating rules for the crypto industry. On December 1, India took up the presidency of the G20 group of nations.
Last year, Finance Minister Nirmala Sitharaman had said that among its top priorities, India is looking to work with the other 19 member nations of the G20 in formulating a framework around cryptocurrencies, that would work on an international level.