- Indian lawmakers begin a series of consultations with local and global crypto companies, including Binance, CoinDCX, WazirX, and others.
- Senior lawmaker Bhatruhari Mahtab said the consultations were to draft better laws on Virtual Digital Assets.
- The first series of consultations has already taken place with senior government agencies, including the RBI and the Finance Ministry, and with industry representatives from Indian exchanges.
India Begins Comprehensive Dialogue on Crypto Laws
Indian lawmakers have begun a comprehensive dialogue with representatives from leading crypto companies, including Coin DCX, Binance, and others. Below is a video statement from the leader of the Parliament Finance Committee, Chairman Bhatruhari Mahtab, who said that crores of rupees were flowing into crypto, highlighting the need for regulations.
Current State of Crypto Laws in India
India has one of the harshest crypto laws in the world, which virtually makes it impossible to trade or invest without going into losses.
Flat 30% Tax on Income
Every crypto profit has to pay 30% flat income tax regardless of how much other losses they have incurred in cryptocurrencies. This rate is much higher than the first income tax slab of 5% and sits close to the highest slab of 30%. It is also higher than the highest GST slab of 28%.
1% TDS
Each crypto-fiat conversion is subject to a 1% tax deducted at source, which the buyer or seller must report to the income tax authorities.
No Offset of Losses
Any losses incurred due to crypto trading or investment cannot be offset against profits, meaning all profits will be liable to tax, but not losses.
70% Penalty Tax
A 70% Penalty Tax is also levied for those who do not disclose their crypto income.
Expected Reforms
We at BFM Times expect the following changes in the tax laws.
Rationalization of Taxes
Tax rates are expected to be lowered to income tax brackets, or to a capital gains tax (max 20%).
Stablecoin Law
Following international norms, stablecoin laws could be introduced with a separate reporting mechanism. It could also give birth to an Indian Rupee-based stablecoin.
Offset of Losses
Offset of losses against profits (only in crypto) could be allowed.
Disclaimer: BFM Times acts as a source of information for knowledge purposes and does not claim to be a financial advisor. Kindly consult your financial advisor before investing.
