The crypto tax proposal presented by the Indian Finance Minister Nirmala Sitharaman is now one step closer to becoming law as the lower house of parliament is scheduled to make a decision on the proposed legislation on Thursday.
The introduction of the finance and annuity bill for the year 2022 will be introduced in Lok Sabha (which is considered the lower house of parliament in India) by Sitharaman on Thursday. This year’s finance bill has included an amendment to India’s income tax laws, and virtual digital assets such as cryptocurrencies and non-fungible tokens or NFTs will be considered as taxable investments.
The first announcement of the amendment of this bill by proposing a 30 percent tax will be applied on digital assets transactions was made in February by the finance minister. At the same time, Sitharaman added the incurred losses from crypto trading would be disallowed to offset the taxes from any profits. Furthermore, while calculating the income, not a single amount of deduction would be allowed except for the Tax acquisition.
According to this method of tax calculation, the traders of cryptocurrency, including bitcoin (BTC) and Ethereum (ETH), will have to pay 30 percent taxes on gains, but if the price of coins falls, it won’t be accounted for losses. A lot of crypto experts have criticized the legislation, which will most likely be effective from April 1, 2022, after discussions in Lok Sabha on Thursday.
This tax proposal is a substitute for a previous legislative bill that would have banned private cryptocurrency in India. As per the recently published Lok Sabha schedule, the Indian parliament is not going to have further discussion on the crypto bill during the budget session, which is going to end on April 8.
India has not yet established any kind of concrete regulatory framework regarding digital and virtual assets after the decision of the Supreme Court to lift the ban on cryptocurrencies by the Reserve Bank of India (RBI) in 2020. In a country with more than 1.4 billion population, this tax proposal is the closest step the Indian government is undertaking, which in turn will help crypto gain some kind of legitimate status in India.