India’s Lower House of Parliament has approved a “Finance Act” with controversial amendments regarding the taxation of digital assets. The new rules will take effect April 1, 2022, reports The Indian Express.
Earlier, the country’s Finance Ministry determined that traders would not be able to offset losses in one digital asset with gains in another when calculating taxes. The law also calls for a 30% tax on cryptocurrency transactions and a 1% TDS fee.
Under Indian law, income tax is levied at source. This means that when a taxable cryptocurrency transaction is made, the user would be required to deduct the tax (TDS) based on a set rate and remit these fees to the government themselves.
Industry participants in India opposed the Ministry of Finance’s proposed amendments, hoping to relax the TDS and cryptotransaction tax provisions. Parliament, however, did not take their views into account.
According to CoinDesk, industry players are now considering an appeal to the Supreme Court. Tax attorney Rajat Mittal stressed that the new rules have “made it virtually impossible” for exchanges to trade and operate daily in India.
In February 2022, Reserve Bank of India Governor Shaktikanta Das warned investors against investing in cryptocurrency.