The Indian industrial association has asked the country’s finance minister to clarify the taxation of cryptocurrencies in the Union budget for 2022-2023. “The budget should ideally propose consistent rules for direct taxation and the Goods and Services Tax Council should detail the applicability of taxation, otherwise there will be confusion.”.
Industry wants cryptocurrency taxation laws clarified
India’s industry association IndiaTech has written to the country’s finance minister, Nirmala Sitharaman, regarding the taxation of cryptocurrencies. The association represents the country’s main crypto exchanges, including Coinswitch Kuber, WazirX and Coindcx.
In its letter, the association asked the Minister of Finance to provide clarification on the taxation of cryptocurrencies in the Union budget 2022-2023. The industry body also urged the government to change existing tax laws to include cryptoassets and create the clear legislative framework for the cryptosphere. IndiaTech President and CEO Rameesh Kailasam told Ettech:
“The budget should ideally propose consistent rules for direct taxation and the Goods and Services Tax Council should detail the applicability of taxation, otherwise there will be confusion.”.
Authorities inspect crypto exchanges to eliminate tax evasion
Some crypto exchanges have been accused of evading the Goods and Services Tax (GST). India’s Tax Intelligence Directorate (DGGI) is closely examining several crypto companies to identify cases of tax evasion.
The Directorate General of Tax Intelligence recently raided major crypto exchanges and discovered a tax evasion “Massive”. The crackdown reportedly uncovered a tax evasion worth around 70 million rupees ($ 9.4 million). Crypto exchanges have blamed the confusion of tax laws as the reason they failed to pay taxes properly.
The demand to recognize cryptocurrencies as assets
IndiaTech urged Finance Minister Nirmala Sitharaman to recognize cryptocurrencies as digital assets, instead of currencies. The industry association also recommended levying a flat-rate tax on products and services of 18% only on commissions from exchanges.
There is still no law in India that directly regulates cryptoassets. A cryptocurrency bill was due to be considered in the winter session of parliament, but it was not passed, and the Indian government is reportedly reworking the bill.
India appears to have a long way to go before reaching consensus on crypto regulation. Some experts have spoken on several occasions, noting what they expected once the law finally comes into force. Hopefully Indian lawmakers find the right balance to foster the development of the crypto industry without harming the traditional economy.
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