The crypto industry has sought once again the government, to either reduce or eliminate the 1% tax deducted at source (TDS) proposed on the proceeds of all crypto transactions.
Crypto platforms are members of Blockchain and Crypto Assets Council (BACC), which is part of the Internet and Mobile Association of India, and IndiaTech. Through which they have demanded that the proposed TDS be reduced to about 0.01%, According to two people ET spoke to.
In this regard, startup industry body IndiaTech has requested to finance minister and revenue secretary, to eliminate the TDS entirely or to bring it down to 0.01%.
“While we raised many issues that require clarifications from the finance ministry, however what needs to be immediately relooked at is the manner of treatment. The 1% tax at source also makes it unviable and if track and trace was the intent, a 0.01% can serve that intent,” said said Rameesh Kailasam, chief executive of IndiaTech.
Further, in the letter, IndiaTech has made six recommendations, including taxing virtual digital assets (VDAs) similar to assets in the investment class and withdrawing the TDS requirement entirely due to its economic and administrative challenges. It also sought a clearer definition of VDAs.
However, earlier, Crypto exchanges had sought clarity on Crypto Assets from government. They had also urged government to reconsider TDS proposal, while, in the budget 2022 Finance Minister proposed a 30% tax on returns from digital currencies and a 1% TDS on all transactions involving digital assets.
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