Crypto exchanges met with the ministry asking for a reconsideration of the crypto tax, but they received zero response.
In India, it seems that an official agreement regarding cryptocurrencies got achieved. Or at least that is what the Finance Minister, Nirmala Sitharaman, said when commenting that the Finance Ministry and the Central Bank of India, RBI, agree with the new policies aimed at cryptocurrencies framed in the budget proposal, which include new taxes.
Sitharaman told a news conference after addressing the RBI central board The RBI, and the government agreed that discussions are still ongoing, even before the budget discussions were underway and will continue. Any point that the government or the Reserve Bank takes happens only after a debate.
New Rules in a Country Like India
These new crypto policies, expected to take effect in March, got revealed as part of the annual budget speech on Feb. 1. The policies add at least 30% tax on any income from the operations with virtual digital assets, the first tax of this nature for the nation. In addition, there is a deadline to enter the digital rupee for April 2023 and a 1% tax.
According to these new announcements, the minister minimized clashes about different opinions between the central bank and the ministry. He said they have to respect their stances, without ignoring what they must do regarding the priorities of citizens and in the interest of the nation.
Exchanges in Disagreement with Tax
The Indian crypto community has disagreed with the resolution that includes tax and even signed a petition on Change.org, which counts on more than 80,000 signatures. Coindesk says the meeting between some representatives of the Indian crypto environment and the policymakers was the first contact between the crypto industry and lawmakers since Finance Minister Nirmala Sitharaman revealed the new crypto tax policies.
The exchanges are also planning a more detailed initiative, helped by the industry entity Council and other auditing firms, which take part in the Internet and Mobile Association of India, leading meetings with the government on behalf of the industry.
According to sources, the framework relies on convincing the government to drop the 1% TDS clause from the finance bill. Gaurav Mehta, the founder of Catax, said he does not think exchanges should see 1% TDS as an obstacle.
According to him, the tax will only be a complication for those exchanges that count on custody operations, airdrops, Initial Cryptocurrency Offerings, among others. However, “for exchanges that engage in standard exchange trading, TDS should be a piece of cake,” Mehta said.
Sidharth Sogani, the founder of Crebaco, thinks that the government may come up with an alternative procedure saying that the potential of the crypto space is just getting ignored. If they just adjust and simplify compliance, the industry will grow faster and would expand in a better way.
By: Jenson Nuñez
