Parliament Member Says 1% TDS Will Kill Crypto Asset Class in India, Urges Government to Reconsider

Parliament Member Says 1% TDS Will Kill Crypto Asset Class in India, Urges Government to Reconsider

An Indian parliament member has warned that imposing a 1% tax deducted at source (TDS) on every crypto transaction will kill the nascent asset class. This tax provision is contained in Finance Bill 2022 which Lok Sabha, the lower house of India’s parliament, has passed. However, India’s finance minister insists that the TDS on crypto transactions is for tracking purposes. Parliament Member Raises Concerns Over 1% TDS on Crypto Transactions

Lok Sabha, India’s lower house of parliament, passed Finance Bill 2022 Friday which includes a proposal to tax crypto income at 30% and impose a 1% tax deducted at source (TDS) on every crypto transaction. The 1% TDS will go into effect on July 1 while the 30% income tax will start levying on April 1.

Parliament member Ritesh Pandey raised concerns regarding the 1% TDS on crypto transactions. He explained in Lok Sabha how this tax will kill the crypto industry. For example, he said that if a user buys crypto, then transfers the coins to a wallet, and uses them to buy a non-fungible token (NFT), the user will be charged a 1% TDS at each stage. He exclaimed: When you impose a 1% TDS at three stages, it will give birth to red tapism. Doing so will also finish this asset class, which is very young.

However, Indian Finance Minister Nirmala Sitharaman claims that the 1% TDS on crypto is for tracking purposes and it is nothing new.

She said in parliament Friday: “TDS (tax deducted at source) is more for tracking. It is not an additional tax and not a new tax.” The finance minister emphasized: It is a tax that will help people track it, but at the same time the taxpayer can always reconcile it with the total tax to be paid to the government.

Nonetheless, many people in the crypto community in India agree with Parliament Member Pandey about the negative impact imposing a 1% TDS on crypto will have.

Aditya Singh, who co-founded the Crypto India Youtube channel, commented: “No loss setoff plus 1% TDS will force a lot of traders to stop day trading or to move to international exchanges & dex.” He added that “This will result in liquidity crises on Indian exchanges plus lower trading fee collection hence lower GST revenue” for the Indian government.

The founder of cryptocurrency exchange Wazirx, Nischal Shetty, noted that “1% TDS is an example of killing the golden goose.” He opined: Hope to see the government revisit this and reduce or eliminate this TDS in order to help the crypto industry grow further Tags in this story 1% TDS, 1% TDS India, 30% crypto tax, finance bill 2022, India tax crypto, India tax cryptocurrency, indian finance minister, indian parliament, Indian Parliament member, Indian tax, lok sabha, tracking TDS

What do you think about how India plans to tax crypto income and transactions? Let us know in the comments section below. Kevin Helms

A student of Austrian Economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open-source systems, network effects and the intersection between economics and cryptography. Spanish Treasury Admits That Cryptocurrency Holdings Don"t Need to Be Declared Under Model 720 TAXES | 4 days ago Indian Government Reveals How It Plans to Tax Cryptocurrency Transactions TAXES | 6 days ago

Image Credits: Shutterstock, Pixabay, Wiki Commons Previous articleNoVa Battles Rocked the 2022 Dubai Crypto Expo Next articleAnonymous Claims It Has Released 28GB of Bank of Russia Documents Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article. Read disclaimerShow comments More Popular NewsIn Case You Missed ItChinese Authorities Arrest Alleged Masterminds Behind an Online Virtual Currency Pyramid Scheme

Authorities in China recently announced the arrest of ten suspects they say are behind an online pyramid platform that is thought to have stolen millions of dollars from unsuspecting users. The suspects are accused of using the promise of high ... read more.BNDES Director Offers New Insights on Development of Brazilian Blockchain Network US Justice Department Returns Stolen Bitcoin to Victim of Government Imposter Scam President Zelenskyy Signs Ukraine’s Law ‘On Virtual Assets’ ASIC Mining Rig Manufacturer Canaan Reveals $100 Million Stock Buyback Program