A tax proposal on crypto from India’s Finance Minister Nirmala Sitharaman may be closer to becoming law as the country’s lower house of parliament is scheduled to consider the legislation on Thursday.
According to a Wednesday publication, Sitharaman will be introducing appropriation and finance bills for 2022 to the Lok Sabha — the lower house of parliament — on March 24. The Finance Bill includes an amendment to the country’s income tax laws identifying “virtual digital assets” — including cryptocurrencies and nonfungible tokens — as taxable investments.
The amendment to India’s laws proposed a 30% tax on digital asset transactions, first announced by the finance minister in February. Sitharaman pointed out at the time that losses incurred through crypto trading would not likely be able to offset profits from taxes. In addition, no deductions would be permitted for calculating income “except for acquisition costs.”
According to this tax calculation, traders would likely have to pay 30% taxes on gains from cryptocurrencies such as Bitcoin (BTC) and Ether (ETH), but not account for losses from falling coins’ prices. Experts criticized the proposal, which is likely to take effect on April 1 following discussion on Thursday.
If you made loss in Bitcoin, you cannot set it off with profit in Ethereum. The new taxation law was clarified in parliament today.
My suggestion is to sell everything you have before March 31, 2022. And start fresh from April 2022.
Cost of mining cannot be deducted too! pic.twitter.com/pfSGPAOFBO
— Naimish Sanghvi (@ThatNaimish) March 21, 2022
The Finance Bill 2022 will be discussed & passed soon.
— Aditya Singh (@CryptooAdy) March 23, 2022
The tax policy on crypto is seemingly a legislative substitute for a previously proposed bill that would have banned “private cryptocurrencies” in India. According to the Lok Sabha’s most recently published list of business, India’s parliament is not scheduled to hear discussion on the crypto bill during its budget session, which ends April 8.
A country with a population of nearly 1.4 billion, India has yet to establish a concrete regulatory framework for digital assets following the country’s high court’s decision in 2020 to lift a ban from the Reserve Bank of India on banks dealing with crypto firms. The tax proposal under consideration seems to be the closest crypto markets have come to gaining any sort of legal status in India.