Indian lawmakers have passed a bill amending the Finance Act to tax cryptocurrency. The new rules will take effect on April 1, 2022.
According to the Ministry of Finance, there will be a 30% tax on transactions made with cryptocurrencies and a 1% fee under the TDS. During the calculation of taxes, traders will not be able to compensate losses on one digital asset with profits on another.
To comply with Indian law, income tax is levied at the withholding. This means that when you make a taxable cryptocurrency transaction, you will have to withhold tax (TDS) from the payment amount based on the established rate of tax in favor of the state.
In India, many industry participants opposed the changes proposed by the Ministry of Finance, hoping to soften the TDS provisions and the tax on crypto transactions. However, Parliament did not take their opinion into account.
CoinDesk reports that now industry participants are considering appealing to the Supreme Court. Tax lawyer Rajat Mittal explained that the new rules “made it almost impossible” for exchanges to operate on a daily basis in India.
Shakticanta Das, the head of the Reserve Bank of India, warned investors against investing in cryptocurrencies in February 2022.