Crypto industry urges FM to rethink proposed 1% TDS

The crypto industry has reached out to the finance ministry, seeking to either reduce or eliminate the 1% tax deducted at source proposed on the proceeds of all crypto transactions, as the Finance Bill will be approved in the Parliament session.

Top crypto players are taking up the demand with the ministry through the Blockchain and Crypto Assets Council, which is part of the Internet and Mobile Association of India, and startup industry body IndiaTech.

The industry asked the finance ministry to relook at 30 percent tax on income from transactions in crypto assets, saying the tax is levied without waiting for the receiver to sell it and book any profit. Industry experts are of the view that crypto-assets taxation requires more deliberation before implementation as the budget proposals lack clarity on many issues.

Finance Minister Nirmala Sitharaman proposed a 30 percent tax on gains made from any virtual digital assets from April 1. The budget has also proposed a 1 percent TDS on payments towards virtual currencies beyond Rs 10,000 in a year and taxation of such gifts in the hands of the recipient.

The Reserve Bank of India (RBI) Governor Shaktikanta Das reiterated that private cryptocurrencies are a threat to macroeconomic and financial stability. His remarks come after the Budget 2022-23 proposed a 30 percent tax on gains made on crypto assets from the financial year beginning April 1.