The crypto industry has urged the government to reduce the TDS used to pay for cryptocurrency trading proceeds to 0.01% or 0.05% from the proposed 1%, saying it would hurt retail traders.
CoinDCX CEO and co-founder Sumit Gupta said the 30 percent tax on cryptocurrency income is high and should be lowered.
“At the industry (level), we are engaging with the government and have submitted a presentation on how a tax of 30% and above and how a 1% TDS is not good for industry growth. It will lock in funds for traders and get them from The market sucks liquidity. If there is no liquidity, retail investors will suffer,” Gupta told reporters.
At the same time, he said, CoinDCX is also working with traders on its platform to comply with the new tax standards.
“We will try to keep things simple, but we will continue to have a dialogue with the government to ask them to reduce the TDS (tax deducted at source) to 0.01 or 0.05 per cent. Income tax of 30 per cent is also on the higher side, we Ask them to lower,” Gupta said.
Budget 2022-23 clarifies the issue of income tax on crypto assets.
From April 1st, a 30% income tax plus additional taxes and surcharges will be levied on such transactions, just like winnings from horse racing or other speculative transactions.
Budget 2022-23 also proposes a 1% TDS on virtual currency payments over Rs 10,000 in a year and a tax on such gifts in the hands of the recipient. The threshold for TDS is limited to Rs 50,000 per annum for certain persons including individuals/HUFs whose accounts are required to be audited under the IT Act.
Regulations related to the 1% TDS will come into effect on July 1, 2022, while gains will be taxed from April 1.