Indian Crypto Association Pushes Lower Taxes For Crypto Businesses
While budget talks are going on, a group that supports crypto is trying to get the taxes to be less harsh.
Indian cryptocurrency trade group Bharat Web3 Association (BWA) has raised concerns about high taxes and unclear regulations in a list of concerns and suggestions sent to the Indian Finance Ministry, which is holding consultations ahead of the budget for 2023-24.
Next week, there will likely be a meeting between the BWA and officials from the Indian Finance Ministry, especially from the Central Board of Direct Taxes (CBDT).
High Taxes Hurt Growth
Media reports say that BWA, whose founding members include Coinbase, CoinDCX, CoinSwitch Kuber, and Polygon, has said that India’s tax policies are hurting the growth of the crypto business.
“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 which can help address the concerns of the government and at the same time allow growth of this sector,” a BWA representative told Business Standard.
In the budget for 2022-23, the Finance Ministry put in place a 30% tax on capital gains and a 1% tax deduction at source (TDS). It also made clear that profits from crypto transactions won’t be able to be carried forward and used to make up for losses.
These harsh moves hurt the crypto trade a lot, and the number of trades on Indian crypto exchanges dropped by between 90% and 95%.
Even though TDS returns can be claimed, traders don’t like having their capital locked up because it doesn’t make them any money. Representatives of the crypto industry have been asking for this number to go down to 0.1%.
Stronger Regulations Are Needed
In light of the FTX crisis, the group that supports crypto also asked the Finance Ministry to come up with strong rules for the sector. It said that BWA is working with the government to make sure that a strong framework for rules and regulations is put in place.
The association also said that FTX’s failure was caused by a lack of corporate governance, which is a problem in traditional finance as well. It said that businesses that deal with cryptocurrency have to put in a lot of work, but that a strong regulatory environment can help make things better.
